Question:

Price discrimination is possible

A.

Under any market form

B.

Only under monopoly

C.

Only under monopolistic competition

D.

Only in perfect competition

Answer» b. Only under monopoly

Question:

Demand curve of a firm is perfectly elastic under:

A.

Perfect competition

B.

Monopoly

C.

Monopolistic competition

D.

Oligopoly

Answer» a. Perfect competition

Question:

Differentiated but close substitutes exist under:

A.

Perfect competition

B.

Monopoly

C.

Monopolistic competition

D.

All of the above

Answer» c. Monopolistic competition

Question:

In the long run, a perfectly competitive firm earning zero economic profits

A.

will exit the market in search of more profitable use of its resources

B.

is earning a normal rate of return on its investments

C.

signifies that the firm is performing poorly and so should exit the market

D.

will break even

Answer» b. is earning a normal rate of return on its investments

Question:

Which of the following is a characteristic of monopolistic competition?

A.

Few sellers

B.

A differentiated product

C.

Easy entry into and exit from the industry

D.

All of the above

Answer» a. Few sellers

Question:

The term group equilibrium is referred to

A.

Duopoly

B.

Monopolistic competition

C.

Perfect competition

D.

Oligopoly

Answer» b. Monopolistic competition

Question:

Monopsony is a market with ______ buyers

A.

many

B.

few

C.

one

D.

one hundred

Answer» c. one

Question:

When aggregate economic activity is increasing, the economy is said to be in:

A.

an expansion.

B.

a contraction.

C.

a peak.

D.

a turning point.

Answer» a. an expansion.

Question:

The equality between MC and MR is

A.

A necessary condition for equilibrium of the firm under perfect condition

B.

A sufficient condition for equilibrium of the firm under perfect competition

C.

A necessary but not sufficient condition for equilibrium of the firm under perfect condition

D.

A necessary and sufficient condition for equilibrium of the firm under perfect condition

Answer» c. A necessary but not sufficient condition for equilibrium of the firm under perfect condition

Question:

Comparing a monopoly and a competitive firm, the monopolist will

A.

produce less at a lower price

B.

produce more at a lower price

C.

produce less at a higher price

D.

produce less at a lower price

Answer» c. produce less at a higher price