Questions:
Question 1. Perfect competition is not an abstraction from reality; it is reality.
an "ideal type"-that is, a model or guidepost for comparison.
the only market structure in the United States.
the best of all possible worlds.
found in the U.S. steel industry.
Question 2. A monopolist will try to operate
where marginal cost equals marginal revenue.
in the inelastic range of the demand curve.
where average revenue equals marginal revenue.
at the highest price on the demand curve.
Question 3.A competitive firm
can consider only its location in setting price.
must base its competitive price on product differentiation.
has the ability to set its own price.
must accept the price determined by the intersection of the market supply and demand curves.
has no supply curve.
Question 4.A monopolist will have a marginal revenue curve that is
identical to the demand curve.
identical to the marginal cost curve.
below the demand curve.
above the marginal cost curve.
Question 5.Monopolistic competition and oligopoly are examples of
monopoly.
perfect competition.
theories of consumer behavior.
imperfect competition.
the extreme cases on the market structure continuum.
Question 6.Retail outlets operate in which of the following market structures?
perfect competition
monopolistic competition
oligopoly
monopoly
oligopsony
Question 7.At the other end of the market continuum from perfect competition is
the corporation.
oligopoly.
the partnership.
monopsony.
monopoly.
Question 8.A firm in a monopolistically competitive industry faces a downward-sloping demand curve because
the product is homogeneous.
the product is differentiated.
nonprice competition is missing.
barriers to entry are high.
Question 9.The greater the price elasticity of the demand curve that the firm faces in monopolistic competition,
the higher the degree of competition in the industry.
the lower the degree of competition in the industry.
the fewer substitutes for the good produced.
the easier it is for the firm to raise its price.
the less sales the firm will gain from a price decrease.
Question 10.If a monopoly firm observes an increase in total revenue following a price increase, which of the following must be true?
MR > 0
MR < 0
MR = 0
MR = TR