Exam (elaborations)
FPC1 Competency 12 (1)
- Course
- FPC Chapter 2.2 & 2.3
- Institution
- FPC Chapter 2.2 & 2.3
FPC1 Competency 12 (1)
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FPC1 Competency 12Monopolistic competition is a market structure in which
A) firms face barriers to entry.
B) a large number of firms compete.
C) firms produce and sell an identical product.
D) firms face perfectly elastic demand for their product.
E) the firms have no ability to influence the price of their product. - ANS-B) a large number of
firms compete.
Firms in monopolistic competition determine the profit-maximizing level of output by producing
A) the same output level as rivals do.
B) where average total cost is minimized.
C) at the point of minimum average fixed cost.
D) where marginal revenue equals marginal cost.
E) where price equals average total cost. - ANS-D) where marginal revenue equals marginal
cost.
Advertising is a ________ cost that is incurred by ________.
A) variable; monopolies
B) variable; perfectly competitive firms
C) fixed; perfectly competitive firms
D) fixed; monopolistically competitive firms
E) marginal; monopolistically competitive firms - ANS-D) fixed; monopolistic competitive firms
How do advertising and other selling costs affect a firm? A) They shift the marginal cost curve
upward.
B) The only effect is that the excess capacity is reduced.
C) The only effect is that the demand for the product increases.
D) They shift the average total cost curve upward.
E) They do not change demand and shift the average total cost curve downward. - ANS-D)
They shift the average total cost curve upward.
The players in a game theory situation often DO NOT act in their joint interest because of which
of the following?
A) They do not realize the benefit of cooperation.
B) Players strive to minimize their opponents' profits.
C) Players do not understand the game and its payoffs.
D) It is not in each player's self-interest to cooperate.
E) Players understand the game but they do not know which action(s) will benefit their joint
interest. - ANS-D) It is not in each player's self-interest to cooperate.
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