Econ_198_Spr_06_Exam__2

Econ_198_Spr_06_Exam__2 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2006 SECOND HOUR EXAMINATION Name (Please Print): ______________________________________ [42 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 21 points total. 1. Which of the following is not a trait or assumption of competitive markets? a. Established firms have no cost advantages over new entrants. b. Production will occur where marginal cost equals price. c. There will be opportunities for price discrimination as a way of assisting those with more dire economic circumstances.. d. There are no restrictions on entry into the industry. e. There are a large number of firms, or at least there could be (that is, nothing would prevent it/more). 2. In a perfectly competitive industry the demand for a single firm’s product is perfectly elastic because: 3. The important definition or defining characteristic with regard to what constitutes the “short run” is that it is a time frame in which: 4. Compared with corporations, businesses organized as proprietorships: 5. Devising incentives that encourage employees to act in the best interest of the owners of a firm refer to and/or try to solve and/or are associated with: a. economies of scale. b. sunk costs. c. principal-agent problems. d. price searching. e. game theory.
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