ECON 208 FINAL || QUESTIONS & ANSWERS 100% ACCURATE
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ECON 208
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ECON 208
a monopoly is distinguished from a firm operating under any other market structure in the following way: correct answers the monopoly faces a demand curve which is equal to the market demand curve
suppose a monopolist is practicing perfect price discrimination. how does this differ from the situ...
ECON 208 FINAL || QUESTIONS & ANSWERS 100%
ACCURATE
a monopoly is distinguished from a firm operating under any other market structure in the
following way: correct answers the monopoly faces a demand curve which is equal to the
market demand curve
suppose a monopolist is practicing perfect price discrimination. how does this differ from the
situation where this firm is charging a single price for its product? correct answers the firm is
producing a higher quantity, is charging a different price for each unit sold and is earning
higher profits
consider 2 firms, that are producing the same product but with different average costs.
economists say this situation reflects a problem of correct answers productive efficiency
consider a natural monopoly that has declining LRAC over the entire range of the market
demand curve. if it is regulated and required to charge a price that is equal to marginal cost,
the resulting level of output is: correct answers allocatively efficient, but the firm must be
paid a subsidy or it will eventually go out of business
between 1995 and 2014, Canada's greenhouse gas emissions increased by: correct answers
25%
suppose there are many independent dry cleaners in your city, each of which is earning
economic profits. according to the theory of monopolistic competition: correct answers new
dry cleaners will enter the market until each firm is making 0 profits
a monopolistically competitive firm maximizes profits in the short run: correct answers by
equating MC with MR
what is true of a perfectly competitive market?
1 there is freedom of entry and exit
2 consumers prefer certain brands over others
3 all firms in the industry are price takers correct answers 1 and 3
trade generally promotes: correct answers specialization
what is the definition of institution building? correct answers the rich, developed countries
focus their assistance to developing countries on creating stable political infrastructures
all points on a country's PPB are: correct answers productively efficient
if there are economic profits in a monopolistically competitive industry, they will generally
be competed away through the: correct answers entry of new firms
the average revenue for a single price monopolist is: correct answers coincides with its
demand curve
the informal defense of free markets includes the argument that competitive markets
, 1. result in a more equitable distribution of income
2. provide automatic coordination of the actions of decentralized decision makers
3. provide a stimulus to innovation an economic growth because of the pursuit of profits
correct answers 2 and 3
automobile emission standards are an example of correct answers direct regulatory pollution
controls
consider the following statement: P=MC=minimum SRATC=minimum LRAC. this statement
applies to: correct answers a perfectly competitive firm when the industry is in a long-run
equilibrium
it is common for a cartel to collapse when one of more firms in the cartel: correct answers
exceed its output quota
what is meant by the term market failure? correct answers that allocative efficiency has not
been achieved
economic losses in an industry are a signal that: correct answers will lead resources to leave
the industry (until the losses disappear)
the existence of imperfectly competitive firms implies a market failure because: correct
answers those firms will maximize profits by setting price above marginal cost
consider a perfectly competitive firm when its industry is in long-run equilibrium. which of
the following statements about the firm is correct? correct answers the firm has no ability to
affect its products price
one method of regulating a natural monopoly is known as average-cost pricing. using this
method, the regulator requires that the price correct answers long run average cost
economists describe prices as signals in a market economy because correct answers changes
in these signals bring about changes In economic behavior
under what circumstances can a cartel succeed in the long run? correct answers member firms
cooperate and resist their individual incentives
consider a firm in a perfectly competitive market. if this firm were to raise its price, its:
correct answers revenue would fall dramatically
the increases in a nations output and consumption that result from specialization and trade are
called correct answers the gains from trade
consider the case of a natural monopoly with falling long run average costs. if regulation sets
the price equal to marginal cost, then: correct answers the firm would operate at a loss and
eventually go out of business
if entry into a monopolistically competitive industry occurs because of positive profits earned
by the existing firms, the: correct answers emend curve for each existing firm will shift to the
left
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