Question

Question 174 pts

An efficient way to move toward the Nash equilibrium is called:

an agreement.

a principle.

a convergence.

a resolution.

a convention.

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Question 184 pts

In long-run equilibrium, the monopolistically competitive firm:

will earn a positive economic profit.

will cease to advertise.

will no longer need to engage in non-price competition.

will face a perfectly elastic demand curve.

will break even.

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Question 194 pts

Celebrity endorsements are often used by monopolistically competitive firms to boost the reputation of the product that is being endorsed.

True

False

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Question 204 pts

In the context of market structure, the characteristic that best describes a monopolistically competitive market is that:

there are few firms in the market.

firms spend a great deal on advertising and promotion.

entry and exit are both difficult.

firms spend very little on advertising and promotion.

the products produced cannot be easily differentiated.

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Question 214 pts

In the case of public goods, _____.

one person’s consumption of the good reduces the consumption of the good by others

the quantity produced by a private market would be too large from society’s viewpoint

the principle of mutual excludability and principle of rivalry do not apply

individuals can be easily excluded from consuming the good once it is provided

the free rider problem does not arise

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Question 224 pts

Why do market failures arise in case of public goods?

The quantity produced is much more than is actually required by the people.

The quality of these goods is not good enough.

The government wastes a lot of resources for producing a public good.

The users of such goods are required to pay a high price for these goods.

The quantity produced is too less from the society’s point of view.

Answer 1

1. An efficient way to move toward the Nash equilibrium is called a convention

Ans is e) Convention

2. In long-run equilibrium, the monopolistically competitive firm will break even

Ans is e) will break even.

The break even is a point where firms earn zero economic profit and in long run monopolistically competitive firm earn zero economic profit due to free entry and exit.

3. Yes, it is true that Celebrity endorsements are often used by monopolistically competitive firms to boost the reputation of the product that is being endorsed.

Ans is True

4. In the context of market structure, the characteristic that best describes a monopolistically competitive market is firms spend a great deal on advertising and promotion.

Ans is b) firms spend a great deal on advertising and promotion.

5. In case of public good the principle of mutual excludability and principle of rivalry do not apply.

Ans is c) the principle of mutual excludability and principle of rivalry do not apply.

6. Market failures arise in case of public goods because the quantity produced is too less from the society’s point of view.

Ans is e) The quantity produced is too less from the society’s point of view.