Question (TCO 3) Which of the following is most likely to be an implicit cost f

05 Jun Question (TCO 3) Which of the following is most likely to be an implicit cost f

Question
(TCO 3) Which of the following is most likely to be an implicit cost for Company X?

Forgone rent from the building owned and used by Company X

Rental payments on IBM equipment

Payments for raw materials purchased from Company Y

Transportation costs paid to a nearby trucking firm

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Question 2. Question :

(TCO 3) The long run is characterized by

the relevance of the law of diminishing returns.

at least one fixed input.

insufficient time for firms to enter or leave the industry.

the ability of the firm to change its plant size.

Question 3. Question :

(TCO 3) Economists would describe the U.S. automobile industry as

purely competitive.

an oligopoly.

monopolistically competitive.

a pure monopoly.

Question 4. Question :

(TCO 3) A purely competitive seller is

both a “price maker” and a “price taker.”

neither a “price maker” nor a “price taker.”

a “price taker.”

a “price maker.”

Question 5. Question :

(TCO 3) Which of the following is a characteristic of pure monopoly?

Close substitute products

Barriers to entry

The absence of market power

“Price taking”

Question 6. Question :

(TCO 3) A natural monopoly occurs when

long-run average costs decline continuously through the range of demand.

a firm owns or controls some resource essential to production.

long-run average costs rise continuously as output is increased.

economies of scale are obtained at relatively low levels of output.

Question 7. Question :

(TCO 3) Under monopolistic competition entry to the industry is

completely free of barriers.

more difficult than under pure competition but not nearly as difficult as under pure monopoly.

more difficult than under pure monopoly.

blocked.

Question 8. Question :

(TCO 3) The term oligopoly indicates

a one-firm industry.

many producers of a differentiated product.

a few firms producing either a differentiated or a homogeneous product.

an industry whose four-firm concentration ratio is low.

Question 9. Question :

(TCO 3) Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a differentiated oligopolist in a highly concentrated industry?

Subway Sandwiches

US Steel

Ford Motor Company

Alcoa Aluminum

Question 10. Question :

(TCO 3) If the four-firm concentration ratio for industry X is 80

the four largest firms account for 80% of total sales.

each of the four largest firms accounts for 20% of total sales.

the four largest firms account for 20% of total sales.

the industry is monopolistically competitive.

Question 11. Question :

(TCO 3) In economics, how would you define the SHORT RUN, and what is the LONG RUN? How can you distinguish between the two?

Question 12. Question :

(TCO 3) Identify the primary characteristics of perfect competition and monopolistic competition. Give examples of each.