ECS1501 – ASSESSMENT 11
2022
1 A monopoly is a
single buyer of raw materials.
large number of producers each with a small share of the total market output.
single seller of a product that has no close substitutes.
small group of producers with similar products.
2 What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost of the
inputs used in the production process?
The firm will possibly make an economic profit and an accounting loss.
The firm will possibly make an accounting profit but will make an economic loss.
The firm will make both accounting and economic profits.
The firm will make both accounting and economic losses
3 The equilibrium level of output occurs where marginal cost equals marginal revenue.
All buyers and sellers have perfect knowledge of market conditions.
All firms produce where average costs are minimised.
All firms are price takers.
4 At what price should a firm produce to maximise profits in a perfectly competitive market?
where price equals average revenue
where price equals marginal revenue
where price equals total revenue
where price equals marginal cost
5 At which point would Benny’s Bookworms close down? B
2022
1 A monopoly is a
single buyer of raw materials.
large number of producers each with a small share of the total market output.
single seller of a product that has no close substitutes.
small group of producers with similar products.
2 What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost of the
inputs used in the production process?
The firm will possibly make an economic profit and an accounting loss.
The firm will possibly make an accounting profit but will make an economic loss.
The firm will make both accounting and economic profits.
The firm will make both accounting and economic losses
3 The equilibrium level of output occurs where marginal cost equals marginal revenue.
All buyers and sellers have perfect knowledge of market conditions.
All firms produce where average costs are minimised.
All firms are price takers.
4 At what price should a firm produce to maximise profits in a perfectly competitive market?
where price equals average revenue
where price equals marginal revenue
where price equals total revenue
where price equals marginal cost
5 At which point would Benny’s Bookworms close down? B
