Which of the following statement is false with respect to monopolistically competitive firms and monopolies?
a. both face a downward sloping marginal revenue curve
b. both will reduce quantity produced in order to raise prices and extract greater profits
c. both will experience sustained p...
Econ 130 Midterm 3 || with 100% Correct Answers.
Which of the following statement is false with respect to monopolistically competitive firms and
monopolies?
a. both face a downward sloping marginal revenue curve
b. both will reduce quantity produced in order to raise prices and extract greater profits
c. both will experience sustained profits in the long run
d. both lead to deadweight loss in the short run correct answers c. both will experience sustained
profits in the long run
Why would a typical U.S. business fail to take the social costs of pollution into consideration
during the development of their operating strategies?
a. the range of flexible, market-oriented pollution control policies are flawed
b. government regulated the limits for how many pollutant can be emitted
c. it isn't required to pay any of the cost of cleaning up its pollution
d. it is following the principle of voluntary exchange of benefits correct answers c. it isn't
required to pay any of the cost of cleaning up its pollution
If no externalities of pollution exist in a particular industry, the interaction of demand and supply
a. is based on benefits individuals perceive while maximizing utility
b. is based on choices about production relative to total average
costs
c. will coordinate social costs and benefits
d. shifts so supply has no relation to social costs correct answers c. will coordinate social costs
and benefits
Raven Farms raises a substantial number of bees and uses the honey to produce its own skin
healing cream. Raven Farms is situated next to the Oakcreek Apple Orchard. The bees from
Raven Farms pollinate Oakcreek's apple trees. In this instance, Raven Farms
a. dervies more private benefits and provides less social benefit
b. provides more social benefits than it derives in private benefits
, c. provides a marginal social benefit and derives a complete private benefit
d. provides a complete social benefit and derives a marginal private benefit correct answers b.
provides more social benefits than it derives in private benefits
__________ give government the power to block certain mergers, and in some cases, to break up
large firms into smaller ones
a. market regulations
b. antitrust laws
c. nationalization policies
d. restrictive practices correct answers b. antitrust laws
A monopolistic competitive firm may earn abnormally high profits in the
a. short term, but the process of entry will drive those profits to zero in the long run
b. long term, but the process of entry will drive those profits to zero in the short run
c. short run, but after entry occurs, the long term perceived demand curve shifts to the right
d. long run, but after entry occurs, the short term perceived demand curve shifts to the right
correct answers a. short term, but the process of entry will drive those profits to zero in the long
run
In a market with a monopoly, the firm is said to have two major choices to make. Which of the
following correctly sets out those choices?
a. what quality to produce and quality to produce
b. what price to change charge and quantity to produce
c. what quality of labor is needed and what price to charge
d. what quality to produce and price to charge correct answers b. what price to change charge
and quantity to produce
The largest cattle rancher in a given region will be unable to have a(n) _____________ if a
sufficient number of smaller cattle ranchers provide sources of competition
a. oligopoly
b. patent
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