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