ECON201 Week 7 Quiz SCORE 100 PERCENT

Quiz

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Question 1 (10 points)

 

Monopolistic competition is an industry characterized by a:

Question 1 options:

	small number of firms producing identical products, with barriers to entry for firms.
	small number of firms producing similar products, with relatively easy entry for firms.
	large number of firms producing similar products, with relatively easy entry for firms.
	large number of firms producing identical products, with relatively easy entry for firms.

Question 2 (10 points)

 

Imperfect competition is:

Question 2 options:

	a market structure with no more than one firm in the industry.
	an industry in which all firms are price takers.
	a market structure where firms have a degree of monopoly power.
	described by all of the above.

Question 3 (10 points)

 

Imperfect competition includes:

Question 3 options:

	monopolistic competition and oligopoly.
	monopolistic competition and monopoly.
	perfect competition and monopoly.
	monopoly and oligopoly.

Question 4 (10 points)

 

A firm in monopolistic competition maximizes its profit by producing at the level at which:

Question 4 options:

	MC = ATC.
	MC = AR.
	MC = P.
	MC = MR.

Question 5 (10 points)

 

An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit is called:

Question 5 options:

	perfect competition.
	monopoly.
	monopolistic competition.
	oligopoly.

Question 6 (10 points)

 

An oligopoly knows that its _______ affect(s) its _______ and that the _______ of its rivals will affect it.

Question 6 options:

	actions; rivals; reactions
	price changes ; total revenue in a positive way; reactions
	actions rarely; rivals; actions
	price increases; total revenue in the long run only; large but not small price changes

Question 7 (10 points)

 

A concentration ratio is used to measure:

Question 7 options:

	efficiency.
	diseconomies of scale.
	marginal cost.
	market dominance.

Question 8 (10 points)

 

An industry dominated by a few firms, where each of those firms recognizes that its own choices will affect the choices of its rivals and that its rivals' choices will affect it, is a(n):

Question 8 options:

	monopoly.
	oligopoly.
	monopolistic competition.
	perfect competition.

Question 9 (10 points)

 

Price for a firm under monopolistic competition is:

Question 9 options:

	equal to marginal revenue.
	greater than marginal revenue.
	less than marginal revenue.
	greater than total revenue.

Question 10 (10 points)

 

Unwritten or unspoken understandings through which firms collude to restrict competition are called:

Question 10 options:

	cartelization.
	oligopolization.
	overt collusion.
	tacit collusion.

Profit Maximization for a Firm in Monopolistic Competition

Question 11 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Before the innovation reduced the cost, the firm's maximum economic profit was:

Question 11 options:

	$0.
	$30.
	$750.
	$4,500.

Question 12 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' After the innovation reduced the cost, the firm's maximum economic profit is:

Question 12 options:

	$0.
	$30.
	$1,500.
	$3,000.

Question 13 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:

Question 13 options:

	$1,700.
	$1,190.
	$3,060.
	$3,400.

 

   

ECON201 Week 7 Discussion Pricing and Competition

How would a low-cost price leader enforce its leadership through implied threats to a rival? Provide at least one example of such a strategy.

  

ECON201 Week 8 Course Reflection

Did you find the subject to be more applicable to your everyday life than you expected?
What surprised you the most of the content in this course?
Please do not hesitate to share additional comments outside of the scope of these questions.

     

ECON201 Week 5 Discussion Business & their costs

Complete the following simulation and answer the questions below.

• What factors affected demand for your product?
• What pricing strategies did you use?
• Describe your most successful day and your least successful? Why were they successful or unsuccessful?
• What was your total # of cups sold at the end of the week?

           

ECON201 Week 3 Quiz SCORE 100 PERCENT

Quiz

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Question 1 (10 points)

 

Demand is price inelastic if:

Question 1 options:

	the price of the good responds slightly to a quantity change.
	the demand curve shifts very little when a demand shifter changes.
	the percentage change in quantity demanded is relatively small in response to a relatively large percentage change in price.
	all of the above are true.

Question 2 (10 points)

 

If the absolute value of price elasticity is greater than 1, this means the demand curve in that region is:

Question 2 options:

	price elastic.
	price inelastic.
	unit price elastic.
	upward sloping.

Question 3 (10 points)

 

Which of the following will lead to a decrease in total revenue?

Question 3 options:

	price goes up and demand is perfectly inelastic
	price goes up and demand is price inelastic
	price declines and demand is price elastic
	price increases and demand is price elastic

Question 4 (10 points)

 

If total revenue goes up when price falls, the price elasticity of demand is said to be:

Question 4 options:

	price inelastic.
	unit price elastic.
	price elastic.
	positive.

Question 5 (10 points)

 

Price elasticity of demand measures the responsiveness of the change in:

Question 5 options:

	quantity demanded to a change in price.
	price to a change in quantity demanded.
	slope of the demand curve to a change in price.
	slope of the demand curve to a change in quantity demanded.

Question 6 (10 points)

 

The price elasticity of demand is:

Question 6 options:

	always positive.
	always greater than 1.
	usually equal to 1.
	always negative.

Question 7 (10 points)

 

A men's tie store sold an average of 30 ties per day when the price was $5 per tie but sold 50 of the same ties per day when the price was $3 per tie. Hence, the absolute value of the price elasticity of demand is:

Question 7 options:

	greater than zero but less than 1.
	equal to 1.
	greater than 1 but less than 3.
	greater than 3.

Question 8 (10 points)

 

If the total revenue received by a firm does not change when it raises its price, this indicates that the demand for the firm's product is:

Question 8 options:

	unstable.
	price inelastic.
	price elastic.
	unit price elastic.

Question 9 (10 points)

 

The ratio of the percentage change in a dependent variable to the percentage change in an independent variable, all other things unchanged, is:

Question 9 options:

	total revenue.
	production possibilities.
	elasticity.
	slope.

Question 10 (10 points)

 

The price elasticity of a good will tend to be greater:

Question 10 options:

	the longer the relevant time period.
	the fewer number of substitute goods available.
	if it is a staple or necessity with few substitutes.
	All of the above are true.

Supply and Demand in Agriculture

Question 11 (10 points)

 

(Exhibit: Supply and Demand in Agriculture) To help farmers:

Question 11 options:

	a price floor would be set at P4, causing a surplus of Q3 - Q0.
	a price floor would be set at P2, causing a surplus of Q2 - Q0.
	a price ceiling would be set at P4, causing a surplus of Q2 - Q1.
	a price floor would be set at P1, causing a shortage of Q3 - Q0.

Question 12 (10 points)

 

(Exhibit: Supply and Demand in Agriculture) If a price floor at P4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

Question 12 options:

	Q3 - Q0.
	Q3 - Q1.
	Q2 - Q1.
	none of the above are correct.

Question 13 (10 points)

 

(Exhibit: Supply and Demand in Agriculture) If the government set an effective price floor at one of the prices shown on the vertical axis:

Question 13 options:

	with this much wheat on the market, the price would fall to P1.
	Q3 bushels of wheat would be supplied.
	the resulting shortage would be made up by the government out of its accumulated stocks.
	all of the above would be true.

Demand and Price Elasticity 1

Question 14 (10 points)

 

(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.50 and $2.25?

Question 14 options:

	-9
	-19
	indeterminate
	none of the above

Question 15 (10 points)

 

(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.25 and $2.00?

Question 15 options:

	-5.67
	-4.00
	-9.00
	-17.6

Question 16 (10 points)

 

(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $1.75 and $1.50?

Question 16 options:

	-0.42
	-1.5
	-1.86
	none of the above