Econ 101 – Principles of Microeconomics Review Questions for the Final Exam Professor Korinna K. Hansen 1) The _____ broadly a market is defined; the more difficult it becomes to find _________. a)less/goods that are independent. b)less/ substitutes. c)more/substitutes. d)more/complements. 2) Which of the following is LEAST likely to be considered a firm in an imperfectly competitive industry: 3) An important distinction between perfect competition and monopoly is that 4) Market power refers to a firm’s ability to 5) Health Economics research has shown that the price of most brand name drugs tends to increase after the patent expires and generic drugs flood the market. So, although there is a lot more competition after the introduction of all the generic drugs (same chemical entity, not original manufacturer) the price of the brand name drug tends to increase and not decrease. This must be occurring because: a)all customers still want to buy the brand name drug and are too scared of all the generics. b)the brand name company acts like a price leader and sets up an even higher price than before the expiration of the patent law. c)the brand name company is left with fewer, loyal consumers who have a more inelastic demand for the brand name product and are willing to pay the higher price. d)that’s the only thing the brand name company can still do to maintain market power.