Micro+Practice+test+4

Micro+Practice+test+4 - Micro Practice Test 4 1. Economists...

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Micro Practice Test 4 1. Economists use the term imperfect competition to describe: A) all industries which produce standardized products. B) any industry in which there is no nonprice competition. C) a pure monopoly only. D) those markets which are not purely competitive. 2. In which of the following industry structures is the entry of new firms the most difficult? A) pure monopoly B) oligopoly C) monopolistic competition D) pure competition 3. An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product is an example of: A) monopolistic competition B) oligopoly C) pure monopoly D) pure competition 4. Which of the following statements applies to a purely competitive producer? A) It will not advertise its product. B) In long-run equilibrium it will earn an economic profit. C) Its product will have a brand name. D) Its product is slightly different from those of its competitors. 5. Under monopolistic competition entry to the industry is: A) completely free of barriers. B) more difficult than under pure competition but not nearly as difficult as under pure monopoly. C) more difficult than under pure monopoly. D) blocked. Page 1
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6. Monopolistic competition resembles pure competition because: A) both industries emphasize nonprice competition. B) in both instances firms will operate at the minimum point on their long-run average total cost curves. C) both industries entail the production of differentiated products. D) barriers to entry are either weak or nonexistent. 7. Which of the following is not a basic characteristic of monopolistic competition? A) the use of trademarks and brand names B) recognized mutual interdependence C) product differentiation D) a relatively large number of sellers 8. Which of the following is not characteristic of monopolistic competition? A) relatively large numbers of sellers B) product differentiation C) production at minimum ATC in the long-run D) relatively easy entry to the industry 9. A monopolistically competitive industry combines elements of both competition and monopoly . The monopoly element results from: A) the likelihood of collusion. B) high entry barriers. C) product differentiation. D) mutual interdependence in decision making. 10. A significant difference between a monopolistically competitive firm and a purely competitive firm is that the: A) former does not seek to maximize profits. B) latter recognizes that price must be reduced to sell more output. C) former sells similar, although not identical, products. D) former's demand curve is perfectly inelastic.
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11. A monopolistically competitive industry combines elements of both competition and monopoly . It is correct to say that the competitive element results from: A) a relatively large number of firms and the monopolistic element from product differentiation. B)
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Micro+Practice+test+4 - Micro Practice Test 4 1. Economists...

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