T-Mobile 1:41 PM 15. In pure competition, each extra unit of output that a firm

Question

T-Mobile 1:41 PM 15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( a. equal to the price b. less than the price. e. greater than the price. d. equal to the average cost. 16. Which of the following is a barrier to entry? a. Patents b. Revenue maximization c. Profit maximization d. Elastic product demand 17. Which is the best example of price discrimination? ( a. An airline company charging lower fares per pound for air freight than for passengers. b. A telephone company charging lower rates to weekend users than weekday users. c. A supermarket charging lower prices in its inner city store than its out-of-town store. d. A private doctor charging higher fees to patients receiving special services than patients receiving regular services. 18. A high concentration ratio indicates that ) a. the industry is highly profitable. b. the industry is highly competitive. c. many firms produce most of the output in an industry d. few firms produce most of the output in an industry. 19. Money is not an economic resource because ) a. money, as such, does not produce anything. b. idle money balances do not earn interest income. c. it is not scarce. d. money is not a free gift of nature. 20. Which type of goods is most adversely affected by recessions? ) a. Goods for which the income-elasticity coefficient is relatively low or negative. b. Goods for which the income-elasticity coefficient is relatively high and positive. c. Goods for which the cross positive d. Goods for which the cross-elasticity coefficient is negative -elasticity coefficient is

Explanation / Answer

1- IN PERFECT COMPETITION THE MARGINAL REVENUE THAT IS THE ADDITIONAL AMOUNT OF REVENUE EARNED ON SELLING AN ADDITIONAL UNIT OF A COMMODITY IS EQUAL TO PRICE OF HE COMMODITY.

SO ANSWER IS A

2- BARRIERS TO ENTRY ARE THE RESTRICTIONS THAT RESTRICTS THE FIRMS TO ENTER THE INDUSTRY,

HERE THE ANSWER IS A

3- PRICE DISCRIMINATION IS WHEN A N ENTITYIS ABLE TO CHARGE DIFFERENT PRICES FOR THE SAME PRODUCTS FROM DIFFERENT CUSTOMERS.

BEST ANSWER HERE IS C

4- CONCENTRATION RATIO IS BUILT TO CHECK WEATHER THE FIRMS ARE CONCENTRATED IN TERMS OF OUTPUT, A HIG RATIO INDICATES THAT MOST OF THE OUTPUT OR THE LARGER PROTION OF THE OUTPUT IS PRODUCED BY VERY FEW FIRMS

SO ANSWER IS D

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