Question (TCO 3) Wh

31 May Question (TCO 3) Wh

Question

<pclass=”msonormal” style=”box-sizing: border-box;”>(TCO 3) Which of the following is most likely to be an implicit cost for Company X?

Student Answer: 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

Instructor Explanation: Chapter 7.

Points Received: 1 of 1

Comments:

Question 2. Question :

(TCO 3) To economists, the main difference between the short run and the long run is that

Student Answer: the law of diminishing returns applies in the long run, but not in the short run.

in the long run all resources are variable, while in the short run at least one resource is fixed.

fixed costs are more important to decision making in the long run than they are in the short run.

in the short run all resources are fixed, while in the long run all resources are variable.

Instructor Explanation: Chapter 7.

Points Received: 1 of 1

Comments:

Question 3. Question :

(TCO 3) An industry comprised of 40 firms, none of which has more than 3% of the total market for a differentiated product is an example of

Student Answer: monopolistic competition.

oligopoly.

pure monopoly.

pure competition.

Instructor Explanation: Chapter 8.

Points Received: 1 of 1

Comments:

Question 4. Question :

(TCO 3) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue

Student Answer: may be either greater or less than $5.

will also be $5.

will be less than $5.

will be greater than $5.

Instructor Explanation: Chapter 8

Points Received: 1 of 1

Comments:

Question 5. Question :

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

Student Answer: Close substitute products

Barriers to entry

The absence of market power

“Price taking”

Instructor Explanation: Chapter 10.

Points Received: 1 of 1

Comments:

Question 6. Question :

(TCO 3) Confronted with the same unit cost data, a monopolistic producer will charge

Student Answer: the same price and produce the same output as a competitive firm.

a higher price and produce a larger output than a competitive firm.

a higher price and produce a smaller output than a competitive firm.

a lower price and produce a smaller output than a competitive firm.

Instructor Explanation: Chapter 10.

Points Received: 1 of 1

Comments:

Question 7. Question :

(TCO 3) Monopolistic competition means

Student Answer: a market situation where competition is based entirely on product differentiation and advertising.

a large number of firms producing a standardized or homogeneous product.

many firms producing differentiated products.

a few firms producing a standardized or homogeneous product.

Instructor Explanation: Chapter 11.

Points Received: 1 of 1

Comments:

Question 8. Question :

(TCO 3) The term oligopoly indicates

Student Answer: 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.

Instructor Explanation: Chapter 11.

Points Received: 1 of 1

Comments:

Question 9. Question :

(TCO 3) Which of the following is a unique feature of oligopoly?

Student Answer: Mutual interdependence

Advertising expenditures

Product differentiation

Nonprice competition

Instructor Explanation: Chapter 11.

Points Received: 1 of 1

Comments:

Question 10. Question :

(TCO 3) An industry having a four-firm concentration ratio of 85%

Student Answer: approximates pure competition.

is monopolistically competitive.

is a pure monopoly.

is an oligopoly.

Instructor Explanation: Chapter 11.

Points Received: 1 of 1

Comments:

Question 11. Question :

(TCO 3) What is the LAW OF DIMINISHING RETURNS, and why is this law considered a short-run phenomenon?

Instructor Explanation: Chapter 7.

Points Received: 5 of 5

Comments:

Question 12. Question :

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

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