WORKSHEET 4

WORKSHEET 4 - WORKSHEET 4 Recitation for Economics 2010-400...

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WORKSHEET 4 Recitation for Economics 2010-400 – Principles of Microeconomics Fall 2007 1) Monopolistic competition is characterized by which of the following attributes? (i) many sellers (ii) product differentiation (iii) barriers to entry a. (i) and (iii) only b. (i) and (ii) only c. (ii) and (iii) only d. all of the above. 2) In a monopolistically competitive market structure, each firm sells a good that is a. slightly different from goods sold by other firms. b. produced at minimum average cost. c. identical to other goods sold in the market. d. produced at minimum marginal cost. 3) In a monopolistically competitive industry, price is a. above marginal cost since each firm is a price setter. b. equal to marginal cost since each firm is a price taker. c. below marginal cost since each firm is a price setter. d. always a fraction of marginal cost since each firm is a price setter. 4) When free entry is one of the attributes of a market structure, economic profits are a. eventually driven to zero. b.
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WORKSHEET 4 - WORKSHEET 4 Recitation for Economics 2010-400...

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