This question has been answered
Question

Need some help with these practice problems

1- Which of the following is most likely produced in a monopolistically competitive market?


a- ethernet cords


c- fast food


b- autos


d- oil


e- local phone services


2- Monopolistic competition is distinguished from perfect competition in that monopolistic


competitors produce


a- a homogeneous product


c- identical products


b- a homogeneous but unique product


d- differentiated products


e- products similar to those produced by a monopoly.


3- In which of the following market structures is a firm most likely to advertise extensively and


fear entry of new firms?


a- perfect competition


c- monopolistic competition


b- pure monopoly


d- oligopoly


4- A monopolistic competitor's demand curve is


a- perfectly elastic


b- less elastic than a monopolist's or oligopolist's but more elastic than a perfect competitor's


c- as elastic as an oligopolist's


d- more elastic than a monopolist's or oligopolist's but less elastic than a perfect competitor's


e- perfectly inelastic


5- Through advertising and product differentiation, a monopolistic competitor's demand curve


becomes:


a- perfectly elastic


c- as elastic as perfectly competitive


b- less elastic


d- more elastic


e- perfectly inelastic


6- Through advertising and product differentiation, a monopolistic competitor's demand curve:


a- shifts to the right


c- shifts to the left


b- kinks


d- stays the same


e- none of the above


7- A monopolistically competitive firm can raise price somewhat by means of


a- barriers to entry


c- high tariffs


b- product similarity


d- its homogeneous products


e- product differentiation


8- A fall in demand for the output of a monopolistically competitive industry is likely to cause


which of the following in the short run?


a- economic losses for each firm


c- fewer firms in the industry


b- a higher price for each firm's output


d- more firms in the industry


e- economic profit for each firm



9- In the long-run, a monopolistically competitive firm's profit has a tendency to


a- maximize


b- rise above the normal profit


c- converge to normal profit


d- stay the same without any change


e- none of the above


10- The effect of advertising on the demand of a monopolistically competitive firm is


a- to provide information on the quality and price of the products


b- to establish the market share of the firms in the monopolistically competitive industry


c- to raise the demand curve of the firm in the monopolistically competitive market to a higher


level


d- to do a public relation campaign for the monopolistically competitive industry.


11- What causes the decline of the profit margin of the firms in a monopolistically competitive


business is


a- product differentiation


b- lack of strong competition which is the main characteristic of the firms in competitive industry


c- entry to the market


d- lack of strong lobbying by the businesses in the monopolistic competition for higher profits


e- none of the above.


12. Scarce resources are resources


a. That can not be found abundantly


c. That we pay a price for them


b. That are rare and exotic


d. Such as diamond, gold and oil


13. Which of the following is considered capital in economics


a. A $20 bill in your pocket


b. A $1,000,000 saving of EZ corporation in the bank


c. Stocks and bonds owned by individuals


d. A calculator owned by a student


e. All of the above


14. Which of the following statements is (are) normative statement(s)


a. A tax on the tobacco industry will increase the price of cigarettes and will reduce


consumption of cigarettes.


b. Government should increase taxes on the tobacco industry to cut consumption of


cigarettes


c. Smoking is bad for people. Government should raise sales taxes for cigarettes.


d. A and B


e. B and C


15- Monopolies due to economies of scale are called


a- large scale monopolies


c- natural monopolies


b- oligopolies


d- local monopolies


e- none of the above



16. Economics is concerned with


a. The welfare of people living in the economy


b. GDP, inflation, and unemployment


c. Stocks, bonds, and capital markets


d. The allocation of limited resources among unlimited wants


e. The distribution of income and wealth among people


Answer questions 17-18 using the following information. The marketshare of the top four firms


in the Southern California education industry are: 30%, 26%, 15%, 9%.


17. The four-firm concentration ratio is...


a. 80%


c. 0.80%


b. 1130%


d. 1130


e. None of the above


18. The Herfindahl Index is calculated using the top 50 firms in the market. However, what is the


Herfindahl index of the top four firms listed.


a. 60%


c. 0.60%


b. 1882%


d. 1882


e. None of the above


19. A pure monopoly market has a Herfindahl Index of...


a. 0


c. >40%


b. 100


d. 10,000


e. None of the above

Answered by Expert Tutors
Need some help with these practice problems 1- Which of the following is most likely produced in a monopolistically competitive market?
Get unstuck

211,601 students got unstuck by Course
Hero in the last week

step by step solutions

Our Expert Tutors provide step by step solutions to help you excel in your courses