Question 1

Figure 16-9
The figure is drawn for a monopolistically-competitive firm. 
-Refer to Figure 16-9.If the firm were to produce 154.92 units of output,

Accepted Answer

A)   efficient scale would be realized.
B)   ATC would be at its minimum value.
C)   the firm would sustain a loss of more than $2,000.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 2

Figure 16-2
This figure depicts a situation in a monopolistically competitive market. 
-Refer to Figure 16-2.This firm is operating

Accepted Answer

A)   in the short run and earning a positive economic profit.
B)   in the short run and breaking even.
C)   in the long run and earning a positive economic profit.
D)   in the long run and incurring and economic loss.E) A) and B)
F) A) and D)

Question 3

The term excess capacity refers to the fact that a firm produces a lower quantity than it would if it operated at the efficient scale.

Accepted Answer

A) True 
 B)False

Question 4

Your company has recently requested that you travel to Dhaka,Bangladesh,to work on negotiations for a new factory to be located in one of the port cities.Your travel agent provides a list of several hundred local hotels and a Sheraton.In this case,the Sheraton brand-name is likely to be used as a signal of

Accepted Answer

A)   perceived differences that are not likely to exist among your various options.
B)   quality when quality cannot be easily judged.
C)   inefficiency in markets characterized by recognizable brand names.
D)   the quality of general lodging accommodations in Dhaka.E) B) and D)
F) B) and C)

Question 5

Results of the study done by Lee Benham on advertising for eyeglasses would suggest that

Accepted Answer

A)   brand loyalty and market power in the eyeglass market was likely to be more pervasive in states that allowed advertising.
B)   eyeglass sales were more profitable in states that allowed advertising.
C)   optometrists would not be supportive of advertising restrictions.
D)   optometrists would enthusiastically endorse advertising restrictions.E) B) and C)
F) None of the above

Question 6

The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because

Accepted Answer

A)   there are too few firms to reach an efficient level of production.
B)   firms do not operate at the output that minimizes average costs.
C)   more advertising is needed to inform customers about product differences.
D)   consumers do not have enough choice among the product varieties available.E) None of the above
F) A) and B)

Question 7

Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

Accepted Answer

A)   A daily newspaper tailored to appeal to the majority of readers in an area.
B)   Nike creating specialized shoes for American Indians' wider feet.
C)   Pharmaceutical companies spending research and development funds on drugs for common diseases.
D)   Airlines offering daily direct flights from one large city to another.E) B) and C)
F) C) and D)

Question 8

Figure 16-1.The figure is drawn for a monopolistically competitive firm. 
-Refer to Figure 16-1.If the average total cost is $15 at the profit-maximizing quantity,then the firm's maximum profit is

Accepted Answer

A)   $18.
B)   $24.
C)   $36.
D)   $45.E) C) and D)
F) B) and C)

Question 9

Figure 16-3 
-Refer to Figure 16-3.If this firm profit-maximizes,what price will it charge?

Accepted Answer

The answer of Figure 16-3 
-Refer to Figure 16-3.If this...

Question 10

Figure 16-3 
-Refer to Figure 16-3.If this firm profit-maximizes,how much output will it produce?

Accepted Answer

The answer of Figure 16-3 
-Refer to Figure 16-3.If this...

Question 11

A firm has the following cost structure:  If this firm is in a typical monopolistically competitive market,in the long run it will likely produce

Accepted Answer

A)   4 or fewer units of output.
B)   5 units of output.
C)   more than 5 units of output.
D)   None of the above are necessarily correct because there is not enough information to tell.E) B) and C)
F) All of the above

Question 12

Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors.This externality is called the

Accepted Answer

business-s...

Question 13

In a monopolistically competitive market,the number of firms adjusts until economic profits are driven to zero.

Accepted Answer

A) True 
 B)False

Question 14

A monopolistically competitive market could be considered inefficient because

Accepted Answer

A)   marginal revenue exceeds average revenue.
B)   price exceeds marginal cost.
C)   the efficient scale of production is only achieved in the long run,not in the short run.
D)   markup pricing does not occur in any other market structure.E) A) and B)
F) B) and D)

Question 15

On a vacation to China,you find yourself eating every meal at the local Burger King rather than buying a meal from one of the street vendors.Your traveling companion claims that you are irrational,since you never eat Burger King hamburgers when you are home,and Burger King's hamburgers cost more than the meals prepared and sold by China's street vendors.An economist would most likely explain your behavior by suggesting that

Accepted Answer

A)   your behavior is rational,but your friend's behavior is clearly irrational.
B)   you are clearly irrational,but your friend's behavior is rational.
C)   the Burger King brand name suggests consistent quality.
D)   the advertising by Burger King in China is more persuasive than the advertising by Burger King in your home town.E) A) and B)
F) A) and C)

Question 16

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Accepted Answer

Recognizable brand names signal quality ...

Question 17

Figure 16-9
The figure is drawn for a monopolistically-competitive firm. 
-Refer to Figure 16-9.The firm's maximum profit is

Accepted Answer

A)   $-7,000.
B)   $-5,000.
C)   $-2,000.
D)   The firm's maximum profit cannot be determined from the figure.E) B) and C)
F) All of the above

Question 18

One way in which monopolistic competition differs from oligopoly is that

Accepted Answer

A)   there are no barriers to entry in oligopolies.
B)   in oligopoly markets there are only a few sellers.
C)   all firms in an oligopoly eventually earn zero economic profits.
D)   strategic interactions between firms are rare in oligopolies.E) A) and D)
F) A) and C)

Question 19

Figure 16-5 
-Refer to Figure 16-5.Which of the graphs depicts a monopolistically competitive firm in long-run equilibrium?

Accepted Answer

A)   panel a
B)   panel b
C)   panel c
D)   None of the above is correct.E) A) and C)
F) A) and D)

Question 20

Table 16-4
This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm.
 
-Refer to Table 16-4.Which of the following is likely to happen in the long run in this market?

Accepted Answer

A)   The market is currently in a long-run equilibrium.
B)   The market price is likely to fall.
C)   Firms are likely to enter the market since firms are earning a positive economic profit.
D)   Firms are likely to leave the market since firms are earning a negative economic profit.E) A) and D)
F) C) and D)

Exam 16: Monopolistic Competition

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9.The firm's maximum profit is

Correct Answer
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Figure 16-1.The figure is drawn for a monopolistically competitive firm. -Refer to Figure 16-1.If the average total cost is $15 at the profit-maximizing quantity,then the firm's maximum profit is

Correct Answer
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One way in which monopolistic competition differs from oligopoly is that

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Figure 16-3 -Refer to Figure 16-3.If this firm profit-maximizes,how much output will it produce?

Correct Answer
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Table 16-4 This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm. -Refer to Table 16-4.Which of the following is likely to happen in the long run in this market?

Correct Answer
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The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because

Correct Answer
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Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9.If the firm were to produce 154.92 units of output,

Correct Answer
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Figure 16-3 -Refer to Figure 16-3.If this firm profit-maximizes,what price will it charge?

Correct Answer
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Results of the study done by Lee Benham on advertising for eyeglasses would suggest that

Correct Answer
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Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.This firm is operating

Correct Answer
verified

Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors.This externality is called the

Correct Answer
verified
business-s...
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Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

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Figure 16-5 -Refer to Figure 16-5.Which of the graphs depicts a monopolistically competitive firm in long-run equilibrium?

Correct Answer
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The term excess capacity refers to the fact that a firm produces a lower quantity than it would if it operated at the efficient scale.

Correct Answer
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A firm has the following cost structure: If this firm is in a typical monopolistically competitive market,in the long run it will likely produce

Correct Answer
verified

A monopolistically competitive market could be considered inefficient because

Correct Answer
verified

In a monopolistically competitive market,the number of firms adjusts until economic profits are driven to zero.

Correct Answer
verified

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Correct Answer
verified
Recognizable brand names signal quality ...
View Answer

Exam 16: Monopolistic Competition

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9.The firm's maximum profit is

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Figure 16-1.The figure is drawn for a monopolistically competitive firm. -Refer to Figure 16-1.If the average total cost is $15 at the profit-maximizing quantity,then the firm's maximum profit is

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One way in which monopolistic competition differs from oligopoly is that

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Figure 16-3 -Refer to Figure 16-3.If this firm profit-maximizes,how much output will it produce?

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Table 16-4 This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm. -Refer to Table 16-4.Which of the following is likely to happen in the long run in this market?

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The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because

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Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9.If the firm were to produce 154.92 units of output,

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Figure 16-3 -Refer to Figure 16-3.If this firm profit-maximizes,what price will it charge?

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Results of the study done by Lee Benham on advertising for eyeglasses would suggest that

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Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.This firm is operating

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Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors.This externality is called the

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Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

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Figure 16-5 -Refer to Figure 16-5.Which of the graphs depicts a monopolistically competitive firm in long-run equilibrium?

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The term excess capacity refers to the fact that a firm produces a lower quantity than it would if it operated at the efficient scale.

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A firm has the following cost structure: If this firm is in a typical monopolistically competitive market,in the long run it will likely produce

Correct AnswerverifiedShow Answer

A monopolistically competitive market could be considered inefficient because

Correct AnswerverifiedShow Answer

In a monopolistically competitive market,the number of firms adjusts until economic profits are driven to zero.

Correct AnswerverifiedShow Answer

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Correct AnswerverifiedRecognizable brand names signal quality ...View AnswerShow Answer

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Recognizable brand names signal quality ...
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