Microeconomics 3

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What does the shut-down point represent in microeconomics?

The point at which a firm should stop production in the short run if it cannot cover its variable costs

A firm's shut-down point occurs where:

Price equals average variable cost

In the short run, a firm will continue to operate even if it is making a loss as long as:

The firm's total revenue exceeds its variable costs

In a perfectly competitive market, which of the following are firms characterized by?

Many firms, each producing an identical product

In a perfectly competitive market, if firms are earning economic profits in the short run, what is likely to happen in the long run?

New firms will enter the market, increasing supply

Which of the following is NOT a characteristic of a perfectly competitive market?

Firms have some control over pricing

In a perfectly competitive market, firms:

Are price takers

In the short run, if a perfectly competitive firm’s price is below average variable cost, it:

Will shut down production in the short run

In a monopolistically competitive market, firms produce:

Differentiated products

In a monopolistically competitive market, barriers to entry are:

Low, allowing easy entry of new firms

In the short run, a monopolistically competitive firm can:

Earn profits or incur losses

A monopolistically competitive firm maximizes its profit by producing the quantity where:

Marginal cost equals marginal revenue

Which of the following is a characteristic of a monopoly?

Barriers to entry

Which of the following is an example of a natural monopoly?

A local electricity utility

Compared to a perfectly competitive market, a monopoly will generally produce:

Less output at a higher price

In a monopoly market, the firm:

Is the price maker rather than the price taker

Which of the following is a characteristic of a monopoly market structure?

A single firm that controls the entire market supply

The demand curve for a monopolist is:

Downward sloping

Which of the following characteristics best defines an oligopoly market structure?

Few large firms dominate the market

Which of the following market outcomes is most likely in an oligopoly?

Collusion among firms to set prices or output

In a Cournot model of oligopoly, firms assume that:

Each firm will maximize profit based on the output decisions of other firms

In the Bertrand model of oligopoly, firms:

Compete by setting prices, assuming other firms’ prices are fixed

In an oligopoly, which of the following strategies might firms use to avoid price wars?

Collusion

If the demand function for a product is Qd = 120 – 4P and the quantity supplied is Qs = 6P. The equilibrium price is:

If a 10 percent increase in the price results in a 3 percent increase in quantity supplied, the elasticity of supply is:

0.30

The quantity of new smartphones increased by 10 percent. If the price elasticity of demand for new smartphones is 1.25, the price of new smartphones will fall by:

8 percent

A 10 percent decrease in income decreases the quantity demanded by 7 percent. The income elasticity of demand is:

–0.7

Which condition defines the break-even point for a firm?

Total revenue equals total cost

What is the main difference between a firm's shut-down point and break-even point?

Shut-down occurs when price equals average variable cost; break-even occurs when price equals average total cost.

What happens to a perfectly competitive firm's profit in the long run?

Economic profit becomes zero

Which market structure is associated with differentiated products and easy entry?

Monopolistic competition

Which market structure best describes the fast food restaurant industry?

Monopolistic competition

Under which market structure do firms act as price takers?

Perfect competition

What is collusion in an oligopoly?

Firms cooperating to set price or output

Why is there normally only one firm in a natural monopoly?

One firm can supply the entire market at lower cost than multiple firms

What typically happens to price and output when a monopoly replaces a perfectly competitive industry?

Price increases, output decreases

Which firm is LEAST likely to engage in price discrimination?

A perfectly competitive firm

In the long run, perfectly competitive firms:

Earn zero economic profits

A basic assumption of the Cournot model is:

Firms choose output assuming rivals' output is fixed

In a Bertrand oligopoly, the market price tends to:

Equal marginal cost

If both supply and demand curves shift right, what happens to equilibrium quantity?

It increases

If demand is price inelastic, what will happen to total revenue if price rises?

Total revenue increases

If the cross-price elasticity between goods A and B is positive, what does this indicate?

A and B are substitutes

A good is considered inferior if:

Its demand decreases as income increases

If marginal cost is below marginal revenue for a perfectly competitive firm, the firm should:

Increase output

What is true about monopoly pricing compared to perfect competition?

Monopoly price is higher and quantity lower

Which market structure best describes the car manufacturing industry globally?

Oligopoly

A firm is called a 'price taker' if:

It cannot influence the market price and must accept it

Which of the following is not an assumption of perfect competition?

Product differentiation

Why can monopolistic competitors earn only normal profits in the long run?

Entry of new firms eliminates economic profit

What would increase a firm's market power?

Barriers to entry

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問題一覧

What does the shut-down point represent in microeconomics?

The point at which a firm should stop production in the short run if it cannot cover its variable costs

A firm's shut-down point occurs where:

Price equals average variable cost

In the short run, a firm will continue to operate even if it is making a loss as long as:

The firm's total revenue exceeds its variable costs

In a perfectly competitive market, which of the following are firms characterized by?

Many firms, each producing an identical product

In a perfectly competitive market, if firms are earning economic profits in the short run, what is likely to happen in the long run?

New firms will enter the market, increasing supply

Which of the following is NOT a characteristic of a perfectly competitive market?

Firms have some control over pricing

In a perfectly competitive market, firms:

Are price takers

In the short run, if a perfectly competitive firm’s price is below average variable cost, it:

Will shut down production in the short run

In a monopolistically competitive market, firms produce:

Differentiated products

In a monopolistically competitive market, barriers to entry are:

Low, allowing easy entry of new firms

In the short run, a monopolistically competitive firm can:

Earn profits or incur losses

A monopolistically competitive firm maximizes its profit by producing the quantity where:

Marginal cost equals marginal revenue

Which of the following is a characteristic of a monopoly?

Barriers to entry

Which of the following is an example of a natural monopoly?

A local electricity utility

Compared to a perfectly competitive market, a monopoly will generally produce:

Less output at a higher price

In a monopoly market, the firm:

Is the price maker rather than the price taker

Which of the following is a characteristic of a monopoly market structure?

A single firm that controls the entire market supply

The demand curve for a monopolist is:

Downward sloping

Which of the following characteristics best defines an oligopoly market structure?

Few large firms dominate the market

Which of the following market outcomes is most likely in an oligopoly?

Collusion among firms to set prices or output

In a Cournot model of oligopoly, firms assume that:

Each firm will maximize profit based on the output decisions of other firms

In the Bertrand model of oligopoly, firms:

Compete by setting prices, assuming other firms’ prices are fixed

In an oligopoly, which of the following strategies might firms use to avoid price wars?

Collusion

If the demand function for a product is Qd = 120 – 4P and the quantity supplied is Qs = 6P. The equilibrium price is:

If a 10 percent increase in the price results in a 3 percent increase in quantity supplied, the elasticity of supply is:

0.30

The quantity of new smartphones increased by 10 percent. If the price elasticity of demand for new smartphones is 1.25, the price of new smartphones will fall by:

8 percent

A 10 percent decrease in income decreases the quantity demanded by 7 percent. The income elasticity of demand is:

–0.7

Which condition defines the break-even point for a firm?

Total revenue equals total cost

What is the main difference between a firm's shut-down point and break-even point?

Shut-down occurs when price equals average variable cost; break-even occurs when price equals average total cost.

What happens to a perfectly competitive firm's profit in the long run?

Economic profit becomes zero

Which market structure is associated with differentiated products and easy entry?

Monopolistic competition

Which market structure best describes the fast food restaurant industry?

Monopolistic competition

Under which market structure do firms act as price takers?

Perfect competition

What is collusion in an oligopoly?

Firms cooperating to set price or output

Why is there normally only one firm in a natural monopoly?

One firm can supply the entire market at lower cost than multiple firms

What typically happens to price and output when a monopoly replaces a perfectly competitive industry?

Price increases, output decreases

Which firm is LEAST likely to engage in price discrimination?

A perfectly competitive firm

In the long run, perfectly competitive firms:

Earn zero economic profits

A basic assumption of the Cournot model is:

Firms choose output assuming rivals' output is fixed

In a Bertrand oligopoly, the market price tends to:

Equal marginal cost

If both supply and demand curves shift right, what happens to equilibrium quantity?

It increases

If demand is price inelastic, what will happen to total revenue if price rises?

Total revenue increases

If the cross-price elasticity between goods A and B is positive, what does this indicate?

A and B are substitutes

A good is considered inferior if:

Its demand decreases as income increases

If marginal cost is below marginal revenue for a perfectly competitive firm, the firm should:

Increase output

What is true about monopoly pricing compared to perfect competition?

Monopoly price is higher and quantity lower

Which market structure best describes the car manufacturing industry globally?

Oligopoly

A firm is called a 'price taker' if:

It cannot influence the market price and must accept it

Which of the following is not an assumption of perfect competition?

Product differentiation

Why can monopolistic competitors earn only normal profits in the long run?

Entry of new firms eliminates economic profit

What would increase a firm's market power?

Barriers to entry