Question

1.Companies can experience Economies of Scale and get better at production as they increase output quantity. Which of the following is not a reason for this effect? Group of answer choices: a.Labor Specialization b. Managerial Specialization c. Efficient Capital Implementation d. Bureaucratic Decision Making

2. Smartphone flashlight apps are readily available from a variety of different software companies and they all perform the same function. Which market model would these be an approximate example of? Group of answer choices a .Pure Monopoly b.Perfect Competition c.Oligopoly d.Monopolistic Competition

3.Just six American film production companies account for about 90% of all domestic revenue in the movie industry. The US movie industry could be considered to be: Monopolistic Competition Pure Competition an Oligopoly Market a Pure Monopoly

4.What is a characteristic of a purely competitive market? Free Entry/Exit of Marketplace Companies Set Market Price None of These All of These Limited Number of Firms

5. What is the elasticity of demand for any good being produced by a purely competitive firm? >1 <1 ∞ 0

6.For a purely competitive firm, what decisions should they make when the market price (their marginal revenue) is at the following levels?

Less than ATC and less than AVC : a. Minimize loss b. Shut down c.Minimize profit d.Maximize loss e.Maximize Profit

Less than ATC and greater than AVC: a. Minimize loss b. Shut down c.Minimize profit d. Maximize loss e. Maximize Profit

Greater than ATC and greater than AVC: a. Minimize loss b. Shut down c.Minimize profit d. Maximize loss e. Maximize Profit

7. Price is taken as 'given' by an individual firm selling in a purely competitive market because:

-Each seller supplies a negligible fraction of total market share

-product differentiation is reinforced by extensive advertising

-The firm's demand curve is downward-sloping

-There are no good substitutes for the firm's product

8. In the long run a firm will choose a plant size that has the:

-Maximum level of resource use per unit of the total product of output

-Minimum of average fixed costs

-Minimum average total cost of producing the level of output.

-Capacity to produce the largest quantity of the product

9. Which of the following is true for a purely competitive firm producing at an optimal level?

-Marginal revenue will equal marginal cost

-A decrease in output increases profits.

-The firm makes only normal profits.

-Marginal cost will be greater than marginal revenue

Answer 1

1) d. Bureaucratic Decision Making

2) b.Perfect Competition

3) an Oligopoly Market

4) Free Entry/Exit of Marketplace Companies

5) ∞

6) b) shutdown

Minimize loss

Maximize profits

7) Each seller supplies a negligible fraction of total market share

8) Minimum average total cost of producing the level of output.

9) The firm makes only normal profits.