1. If marginal utility is positive but diminishing, then A. average utility must
ID: 1092256 • Letter: 1
Question
1. If marginal utility is positive but diminishing, then
A. average utility must be negative.
B. marginal utility must be above-average utility.
C. marginal utility must be more than total utility.
D.total utility must be positive.
2. The distance between the TC and the TVC curve
A. decreases as output increases.
B. is constant.
C. increases as output increases.
D .is the MC curve.
3. The law of diminishing marginal product
A. does not hold in the long run because there are no fixed inputs in the long run.
B. does not hold in the short run because of fixed costs.
C. holds in the short and long run because of economies to scale.
D. holds in the short run and the long run because as you increase the amount of variable inputs eventually the increases in output will decrease.
4.Which of the following is a characteristic of perfect competition?
A.Easy entry and exit
B. Differentiated products
C. Few firms
D. None of the above
5. When there are large numbers of buyers and sellers, then
A. consumers are able to find out about lower prices charged by other firms.
B. no one buyer or seller has any influence on price.
C. the products sold must look identical.
D. firms will move labor and capital in pursuit of profit-making opportunities to whatever business venture gives them the highest return on their investment.
6. The demand curve for a perfectly competitive firm is horizontal because
A. the firm profits from setting its price higher than the market price.
B. its product is easy for consumers to differentiate from those of other firms.
C. consumers are willing to pay any price to obtain its product.
D. its production decisions cannot influence the market price.
7. Under what condition are profits maximized?
A. at the output rate where marginal cost is greater than marginal revenue
B. at the point at which the difference between price and quantity demanded is greatest
C. at the point at which the difference between total revenues and total costs is negative
D. at the rate of output at which marginal revenue equals marginal cost
8. Monopoly producers face
A. at least one competitive producer of the same product.
B. many competitors producing the same product.
C. only a few competitors producing the same product.
D. no competitive producers of the same product.
9. The effect of a tariff
A. can lead to a monopoly advantage for firms inside the U.S. since they become the sole suppliers inside the U.S.
B. can lead to economies of scale for firms inside the U.S.
C. will be more beneficial to large firms than to small firms.
D. is negligible since it applies to firms outside the U.S.
10. Economies of scale may be a barrier to entry in a situation in which
A. only small-scale production can meet the constantly changing market demand.
B. only large-scale production can lower the per-unit cost of production.
C. only small-scale production can lower the per-unit cost of production.
D. large-scale production is inefficient.
11. The profit-maximizing monopolist will operate in a price range over which
A. supply is elastic.
B. demand is elastic.
C. the price elasticity of demand is less than 1.
D. demand is inelastic.
12. A monopolist engages in price discrimination
A. by charging a higher price when marginal cost is lower.
B. by charging a higher price to consumers whose demand is more elastic.
C. by charging the same price to all consumers.
D. by charging a lower price to consumers whose demand is more elastic.
A. average utility must be negative.
B. marginal utility must be above-average utility.
C. marginal utility must be more than total utility.
D.total utility must be positive.
Explanation / Answer
1-d
2-b
3-a
4-b
5-a
6-d
7-c
8-a
9-c
10-b
11-d
12-c
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