MCQ Questions
Q.1.
both a monopoly and a competitive firm.
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    A monopolistically competitive market could be considered inefficient because
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    A monopolistically competitive market has characteristics that are similar to
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    A monopolistically competitive firm chooses its
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    A distinguishing feature of an oligopolistic industry is the tension between
Q.2.
. require an outlay of money by the firm
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    Economies of scale occur when
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    Other things the same, in which case is the quantity produced the highest?
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    Explicit costs
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    Marginal cost tells us the
Q.3.
increase in output obtained from a one unit increase in labor.
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    The practice of tying is used to
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    The short-run supply curve for a firm in a perfectly competitive market is
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    The marginal product of labor is equal to the
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    Diminishing marginal product suggests that the marginal
Q.4.
as a single monopolist.
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    For a firm in a perfectly competitive market, the price of the good is always
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    An agreement among firms regarding price and/or production levels is called
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    Who is a price taker in a competitive market?
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    As a group, oligopolists would always be better off if they would act collectively
Q.5.
product of an extra worker is less than the previous worker's marginal product.
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    Diminishing marginal product suggests that the marginal
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    The short-run supply curve for a firm in a perfectly competitive market is
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    profits as large as possible, even if it means reducing output.
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    The marginal product of labor is equal to the
Q.6.
equal to marginal revenue.
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    If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
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    If firms in a monopolistically competitive market are earning positive profits, then
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    A monopolistically competitive market could be considered inefficient because
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    For a firm in a perfectly competitive market, the price of the good is always
Q.7.
total cost
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    Which of the following can be added to profit to obtain total revenue?
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    Which of the following goods are not likely to be sold in monopolistically competitive markets?
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    Which of the following conditions distinguishes monopolistic competition from perfect competition?
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    Which of the following is a characteristic of monopolistic competition?
Q.8.
a. price. b. average revenue. c. total revenue divided by output. All of the above are correct.
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    Firms operating in competitive markets produce output levels where marginal revenue equals
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    Which of the following statements regarding a competitive market is not correct?
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    If firms in a monopolistically competitive market are earning positive profits, then
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    A monopolistically competitive market could be considered inefficient because
Q.9.
exit if P < ATC
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    Which of the following represents the firm's long-run condition for exiting a market?
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    We must be knowledgeable of how people behave in strategic situations if we are to understand
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    inputs that were fixed in the short run become variable.
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    Which of the following can be added to profit to obtain total revenue?
Q.10.
package products to sell at a combined price closer to a buyer's total willingness to pay.
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    A production function describes
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    When an oligopoly market reaches a Nash equilibrium,
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    The practice of tying is used to
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    The marginal product of labor is equal to the
Q.11.
society is better served by having one firm supply the product
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    In order to sell more of its product, a monopolist must
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    When a firm experiences continually declining average total costs,
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    Who is a price taker in a competitive market?
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    When new firms have an incentive to enter a competitive market, their entry will
Q.12.
a monopoly firm reducing its price in an attempt to maintain its monopoly.
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    Predatory pricing refers to
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    Economies of scale occur when
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    free entry
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    Marginal cost tells us the
Q.13.
tap water
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    Which of the following conditions distinguishes monopolistic competition from perfect competition?
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    Which of the following represents the firm's long-run condition for exiting a market?
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    Which of the following goods are not likely to be sold in monopolistically competitive markets?
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    Which of the following can be added to profit to obtain total revenue?
Q.14.
decreasing marginal product.
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    The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
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    A distinguishing feature of an oligopolistic industry is the tension between
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    If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
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    If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits
Q.15.
long-run average total costs fall as output increases.
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    profits as large as possible, even if it means reducing output.
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    For a monopolist, marginal revenue is
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    A production function describes
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    Economies of scale occur when
Q.16.
price and quantity just as a monopoly does.
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    Imperfectly competitive firms are characterized by
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    A monopolistically competitive firm chooses its
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    A monopolistically competitive market could be considered inefficient because
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    For a monopolist, marginal revenue is
Q.17.
government-created monopolies.
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    When an oligopoly market reaches a Nash equilibrium,
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    Patent and copyright laws are major sources of
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    When an oligopoly grows very large, the
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    A firm's opportunity costs of production are equal to its
Q.18.
lower its price.
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    Which of the following is a characteristic of a monopoly?
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    Imperfectly competitive firms are characterized by
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    In order to sell more of its product, a monopolist must
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    An agreement among firms regarding price and/or production levels is called
Q.19.
less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.
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    The marginal product of labor is equal to the
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    The practice of tying is used to
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    For a monopolist, marginal revenue is
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    Predatory pricing refers to
Q.20.
collusion.
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    Who is a price taker in a competitive market?
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    An agreement among firms regarding price and/or production levels is called
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    When a firm experiences continually declining average total costs,
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    If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
Q.21.
resale price maintenance.
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    Which of the following pairs illustrates the two extreme examples of market structures?
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    The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
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    The practice of tying is used to
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    If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
Q.22.
oligopolistic markets.
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    We must be knowledgeable of how people behave in strategic situations if we are to understand
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    The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
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    The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
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    Which of the following pairs illustrates the two extreme examples of market structures?
Q.23.
. undesirable, because it leads to output levels that are too low and prices that are too high.
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    profits as large as possible, even if it means reducing output.
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    From society's standpoint, cooperation among oligopolists is
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    The short-run supply curve for a firm in a perfectly competitive market is
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    Diminishing marginal product suggests that the marginal
Q.24.
barriers to entry
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    Which of the following is a characteristic of monopolistic competition?
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    Which of the following can be added to profit to obtain total revenue?
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    Which of the following represents the firm's long-run condition for exiting a market?
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    Which of the following is a characteristic of a monopoly?
Q.25.
Price exceeds marginal revenue.
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    A monopolistically competitive market could be considered inefficient because
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    Which of the following represents the firm's long-run condition for exiting a market?
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    Which of the following statements regarding a competitive market is not correct?
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    Which of the following pairs illustrates the two extreme examples of market structures?
Q.26.
a one-unit increase in output will increase the firm's profit.
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    Firms operating in competitive markets produce output levels where marginal revenue equals
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    If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
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    If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
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    If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits
Q.27.
duopoly.
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    The economic inefficiency of a monopolist can be measured by the
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    The simplest type of oligopoly is
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    The practice of tying is used to
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    Marginal cost tells us the
Q.28.
shut down if P < AVC.
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    Imperfectly competitive firms are characterized by
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    We must be knowledgeable of how people behave in strategic situations if we are to understand
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    Competitive firms that earn a loss in the short run should
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    For a firm in a perfectly competitive market, the price of the good is always
Q.29.
In the long run,
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    inputs that were fixed in the short run become variable.
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    Which of the following is a characteristic of a monopoly?
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    Competitive firms that earn a loss in the short run should
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    Imperfectly competitive firms are characterized by
Q.30.
both buyers and sellers
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    Who is a price taker in a competitive market?
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    As a general rule, when accountants calculate profit they account for explicit costs but usually ignore
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    In order to sell more of its product, a monopolist must
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    When a firm experiences continually declining average total costs,
Q.31.
price making ability.
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    When an oligopoly grows very large, the
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    A monopolistically competitive firm chooses its
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    Imperfectly competitive firms are characterized by
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    Competitive firms that earn a loss in the short run should
Q.32.
free entry
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    Which of the following can be added to profit to obtain total revenue?
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    Which of the following is a characteristic of a monopoly?
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    Which of the following statements regarding a competitive market is not correct?
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    Which of the following is a characteristic of monopolistic competition?
Q.33.
a firm will have chosen its best strategy, given the strategies chosen by other firms in the market.
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    When an oligopoly market reaches a Nash equilibrium,
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    The practice of tying is used to
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    The short-run supply curve for a firm in a perfectly competitive market is
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    When an oligopoly grows very large, the
Q.34.
price effect disappears.
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    A monopolistically competitive firm chooses its
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    Which of the following statements regarding a competitive market is not correct?
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    Imperfectly competitive firms are characterized by
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    When an oligopoly grows very large, the
Q.35.
the portion of its marginal cost curve that lies above its average variable cost.
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    Other things the same, in which case is the quantity produced the highest?
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    The marginal product of labor is equal to the
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    Firms operating in competitive markets produce output levels where marginal revenue equals
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    The short-run supply curve for a firm in a perfectly competitive market is
Q.36.
deadweight loss.
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    If there is an increase in market demand in a perfectly competitive market, then in the short run
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    The economic inefficiency of a monopolist can be measured by the
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    Which of the following is a characteristic of monopolistic competition?
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    Which of the following represents the firm's long-run condition for exiting a market?
Q.37.
profit is maximized.
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    The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
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    The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
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    Which of the following conditions distinguishes monopolistic competition from perfect competition?
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    If there is an increase in market demand in a perfectly competitive market, then in the short run
Q.38.
There are a very large number of firms.
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    Other things the same, in which case is the quantity produced the highest?
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    The short-run supply curve for a firm in a perfectly competitive market is
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    In which of the following markets are strategic interactions among firms most likely to occur?
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    A distinguishing feature of an oligopolistic industry is the tension between