All of the following are among the six basic assumptions about perfect competition
Question 1All of the following are among the six basic assumptions about perfect competition EXCEPT __________.
many buyers
many sellers
mobile resources
differentiated products
Question 2If a firm is making an economic profit, then productive resources are earning __________.
their opportunity costs in the long run
more than their opportunity costs
their opportunity costs in the short run
less than their opportunity costs
Question 3In a perfectly competitive industry, if TR > TC, then in the long run, __________.
there will be no change in the number of firms
firms will attempt to expand into monopolies
new firms will enter the industry
firms will exit the industry
Question 4Imagine that Congress has put high tariffs on how much wool can be imported into this country. What type of barrier to entry is this?
corporate
legal
artificial
natural
Question 5Which 1917 legislation prohibited a company from acquiring stock of a competing company if such an acquisition would substantially lessen competition?
the Sherman Antitrust Act, Section 1
the Sherman Antitrust Act, Section 2
the Clayton Act
the New York State Antitrust Statute
Question 6Which of the following is an example of a monopoly that loses money?
the U.S. Postal Service
Apple
the Olympic Games
Microsoft
Question 7All of the following are characteristics of a cartel EXCEPT that they __________.
pursue a moderate pricing policy
have effective sanctions on sellers who cheat the cartel
have many members for more income
have buoyant world demand (high income elasticity)
Question 8The greater the price elasticity of the demand curve that a firm faces in monopolistic competition, the __________.
more sales the firm will gain from a price increase
higher the degree of competition in the industry
fewer substitutes for the good produced
lower the degree of competition in the industry
Question 9For what purpose do economists use a concentration
ratio?
to compare the percentage of an industry’s total sales to another industry’s total sales
to compare, in fraction form, the smallest firm’s size to the largest firm’s size
to measure the average economic success of all the firms in a market
to measure the distribution of economic power among the top firms in a market
Question 10What is a group of firms producing the same, or at least similar, products called?
a monopoly
a corporation
an oligarchy
an industry
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