Market structures

University of Belize Faculty of Management & Social Sciences Microeconomics Quiz #9 April 25, 2007

MULTIPLE CHOICE [20 POINTS]

1)	Resources are said to be used efficiently when

a.	changes in resource allocation will cause costs to rise b.	using resources in a different manner can only be done at the expense of making at least someone worse off c.	commodities are produced in sufficient quantities so that their marginal utility is zero d.	the allocation of resources among industries is fixed in the long run

1)	Productive efficiency refers to

a.	producing at the minimum average cost of production b.	producing what is demanded c.	using resources to ensure that at least some demand for all products is satisfied d.	producing the appropriate mix of products

2)	Allocative efficiency occurs when a firm produces that level of output where:

a.	price exceeds ATC b.	price = mc c.	MR = TC d.	mc = ATC

3.If a monopolist has a straight-line demand curve, its marginal revenue curve

a.	will be the same as the demand curve b.	will fall twice as quickly as the demand curve c.	will lie below the demand curve at all points d.	will cross the demand curve

4.Which statement is true about economic profit in the long run?

a.	the monopolist and the perfect competitor make one b.	neither the monopolist nor the perfect competitor make one c.	only the perfect competitor makes one d.	only the monopolist can make one

5.Price is always read off the ____________ curve.

a.	MC a.	MR b.	ATC c.	Demand

6.When the monopolist is losing money,

d.	we are in the short run e.	we are in the long run f.	it is impossible to tell if we are in the short run or the long run g.	we have to go back and check our work because monopolists don’t lose money

b.	Monopolistic competition differs from perfect competition only with respect to

a.	the number of firms in the country b.	product differentiation c.	barriers to entry d.	economies of scale

c.	Figure one shows a monopolistic competitor

a.	in the short run, breaking even b.	in the short run, taking a loss c.	in the long run, breaking even d.	in the long run making a profit

d.	In the long run, the monopolistic competitor is

a.	more efficient than the perfect competitor b.	less efficient than the perfect competitor c.	as efficient as the perfect competitor

e.	In the short run, the monopolistic competitor will be

a.	definitely making a profit b.	definitely taking a loss c.	definitely breaking even d.	either taking a loss or making a profit

f.	In the long run, the monopolistic competitor will be

a.	making a profit b.	taking a loss c.	breaking even

g.	Product differentiation can take place

a.	only if there are physical differences among the products b.	only if there are no physical differences among the products c.	whether or not there are physical differences among the products

h.	Which of the following would not be a monopolistic competitor

a.	Joe’s barbershop b.	A mom-and-pop grocery store c.	A storefront lawyer d.	A restaurant e.	All are monopolistic competitors

i.	Which statement is true about price discrimination

a.	it generally hurts the poor b.	it is inherently evil c.	it involves charging at least two separate prices for the same good or service d.	it generally involves deceiving the customer