Question

5. The main difference between perfect competition and monopolistic competition is: A) the size of the firms B) the technology used in production C) the features of the product or service are similar, but not identical D) there is only one firm producing the product, but many buyers

6. Public good are: A) rival and excludable B) non-rival and non-excludable C) rival and non-excludable D) non-rival and excludable

7. An example of a public good is a A) rhinoceros that is almost extinct B) hospital health care C) the creation of Pre. Trump of the Space Force D) All are public goods

8. If a government does not establish a rule of law, markets generally are inefficient due to the lack of we---defined: A) natural resources B) property rights C) licenses D) work hours

9. A firm’s LRAC curve keeps going down. This indicates the existence of:

a) specialization b) economies of scale c) diseconomies of scale d) diminishing returns

10. If the marginal product of labor is 4 units per hour and the marginal product of capital is 8 units per hour and labor costs $20 per hour and capital costs $35 per hour, this firm should use: A) more capital

B) more labor C) more capital and labor D) impossible to answer from the information given

11. The founder of economics wrote_________________in _________.

a) The Greatest Gift, 1542 b) My Puppy, My Life, 1924 c) The Wealth of Nations 1776 d) Wealth, Poverty, and Equality, 1848

12. Another word for ATC is a) overhead costs per unit b) production costs per unit C) average unit costs d) trigger costs

13. Profits are the same as: A) TR B) TB C) TR – TC D) none of the above

14. Average variable costs are minimized at their intersection with A) VCs B) TCs C) ATCs D0 MCs

15. At a quantity of zero production: A) A firm’s total costs will be zero B) A firm’s variable costs will be zero C) A firm’s fixed costs will be zero. D) none of the above are correct

16. In the long run, if a firm’s output doubles and its unit costs triple, this is an example of:

A) economies of scale B) diminishing returns to scale c) diseconomies of scale D) constant scale

17. The biggest problem stopping private firm from offering an adequate supply of public goods is; A) free-ridership B) tragedy of the commons C) the sword of Hercules D) bifurcation

18. If there are positive externalities created by a market, the market will give you A) too little quantity and too low a price B) too high quantity at too low a price c) too low quantity at too high a price.

D) too high a quantity at too high a price

19. Markets may not always be sufficient solution due to: a) lack of competition B) insufficient information C)the public goods problem D) all the above are possibilities

20. The yeti, sasquatch, and Big Foot may all have evolved from a common ancestor such as

A) Gigantopithecus B) Plesiosaurs C) Tasmanian Devils D) Pterodactyls

Answer 1

Ans) 1) In Perfectly competitive market, there are many sellers selling homogeneous products. There is no barrier to entry and exit. Eg- vegetable market.

In monopolistic competition, there are many sellers selling homogeneous but differentiated products. There is no barrier to entry and exit. Eg- hotels.

2) Public goods are those goods which are non rivalrous and non excludable. That is, one's usage of good does not reduce its availability for others and no one can be excluded from using it. Eg- tornado alarms, national defence, street lights etc.

3) Assigning of property rights help reduce the externality. Eg- since cows live in ranchers (farmer is the sole owner and thus benefitter) ,they are not extinct despite killing for meats

Whereas, rhinoceros (a common resource) is on verge of extinction due to lack of property rights.

4) Economies of scale is when long run average total cost decreases continuously.

(As per rules and time constraint only one question is allowed. However I have answered first five. Kindly ask other questions separately. Thank you.)