1. A firm will shut down if price is below A. must be between the shutdown point
ID: 1099425 • Letter: 1
Question
1. A firm will shut down if price is below
A. must be between the shutdown point and the break-even point
B. above the break-even point
C. below the shutdown point
D. may be anywhere
2. If price is between the shutdown and break-even points, in the short run the firm will __________ and in the long run the firm will __________.
A. operate; go out of business
B. operate; stay in business
C. shut down; go out of business
D. operate; stay in business
3. If price is above the break-even point, in the short run the firm will ___________ and in the long run the firm will __________.
A. shut down; stay in business
B. shut down; go out of business
C. operate; go out of business
D. operate; stay in business
4. The monopolist and the perfect competitor differ in that
A. they face different demand curves
B. the monopolist does not always produce at an output in which MC=MR.
C. the monopolist is always a large firm
D. the monopolist is more efficient.
5. Each of the following is a legal barrier to entry into an industry except
A. government licensing
B. patents
C. government franchising
D. All of the choices are legal barriers
6. Which statement is true?
A. Big business has a great deal of economic power but very little political power
B. Big business has a great deal of political power but very little economic power
C. Big business has a great deal of economic and political power
D. Big business does not have much political or economic power.
7. Which statement is true?
A. the monopolist's most efficient output is its most profitable output as well
B. the monopolist charges a higher price than the perfect competitor in the long run
C. All monopolists have control over an essential resource
D.None of these statements are true
Explanation / Answer
1. A firm will shut down if price is below
A. must be between the shutdown point and the break-even point
B. above the break-even point
C. below the shutdown point
D. may be anywhere
2. If price is between the shutdown and break-even points, in the short run the firm will __________ and in the long run the firm will __________.
A. operate; go out of business
B. operate; stay in business
C. shut down; go out of business
D. operate; stay in business
3. If price is above the break-even point, in the short run the firm will ___________ and in the long run the firm will __________.
A. shut down; stay in business
B. shut down; go out of business
C. operate; go out of business
D. operate; stay in business
4. The monopolist and the perfect competitor differ in that
A. they face different demand curves
B. the monopolist does not always produce at an output in which MC=MR.
C. the monopolist is always a large firm
D. the monopolist is more efficient.
5. Each of the following is a legal barrier to entry into an industry except
A. government licensing
B. patents
C. government franchising
D. All of the choices are legal barriers
6. Which statement is true?
A. Big business has a great deal of economic power but very little political power
B. Big business has a great deal of political power but very little economic power
C. Big business has a great deal of economic and political power
D. Big business does not have much political or economic power.
7. Which statement is true?
A. the monopolist's most efficient output is its most profitable output as well
B. the monopolist charges a higher price than the perfect competitor in the long run
C. All monopolists have control over an essential resource
D.None of these statements are true
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