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| 1.
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The correct sequence of market structures from most to least competitive is |
| | A) | pure monopoly, oligopoly, perfect competition, monopolistic competition. |
| | B) | oligopoly, pure monopoly, perfect competition, imperfect competition. |
| | C) | perfect competition, monopolistic competition, oligopoly, pure monopoly. |
| | D) | perfect competition, imperfect competition, pure monopoly. |
| | E) | perfect competition, monopolistic competition, pure monopoly, oligopoly. |
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| 2.
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Suppose a firm is collecting $100 in total revenues when it sells 10 units and it receives $99 in total revenues when it sells 11 units. The firm is a(n) |
| | A) | pure monopolist. |
| | B) | oligopolist. |
| | C) | perfect competitor. |
| | D) | imperfect competitor. |
| | E) | monopolistic competitor. |
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| 3.
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Increasing returns to scale occur when a 50% increase in all inputs |
| | A) | increases output by 50%. |
| | B) | increases output by more than 50%. |
| | C) | increases input prices by more than 50%. |
| | D) | increases output by less than 50%. |
| | E) | decreases output by more than 50%. |
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| 4.
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Suppose a firm increases its labor usage and office space (the only inputs used) by 10% and observes a 13% increase in output. If the price of both labor and office space remain constant, then |
| | A) | constant returns to scale are present. |
| | B) | average costs have fallen. |
| | C) | total costs have fallen. |
| | D) | average costs are unchanged. |
| | E) | average costs could be higher or lower. |
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| 5.
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Given the total cost function, TC = 531+14Q, marginal costs are |
| | A) | $531/Q. |
| | B) | $14/Q. |
| | C) | $531. |
| | D) | $14. |
| | E) | impossible to calculate with information provided. |
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| 6.
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With economies of scale |
| | A) | average cost declines as output increases. |
| | B) | marginal cost declines as output increases. |
| | C) | output doubles when inputs double. |
| | D) | all of the above |
| | E) | none of the above |
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| 7.
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A monopoly that results due to economies of scale is called a(n) ___________ monopoly. |
| | A) | imperfect |
| | B) | pure |
| | C) | scale |
| | D) | natural |
| | E) | cost |
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| 8.
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A patent |
| | A) | lasts 15 years. |
| | B) | is granted by a private corporation. |
| | C) | permanently protects the patent holder from competition. |
| | D) | allows firms to recoup research costs. |
| | E) | all of the above |
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| 9.
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A monopolist's marginal revenue |
| | A) | is below price. |
| | B) | can be negative. |
| | C) | can be derived from the demand curve. |
| | D) | is half of quantity demanded when price is 0. |
| | E) | all of the above |
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| 10.
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Charging different prices to different consumers for the same good is an example of |
| | A) | monopolization |
| | B) | increasing returns to scale |
| | C) | price discrimination |
| | D) | perfect competition |
| | E) | monopolistic competition |
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