The greater the product differentiation between monopolistically competitive firms
A) the lower the barriers to entry.
B) the greater the price elasticity of demand.
C) the higher the average variable costs.
D) the lower the price elasticity of demand.
Ques. 2Which of the following statements about full employment is correct? I. Full employment means that the unemployment rate is less than 1/2 of 1 percent. II. Full employment means that the transaction costs associated with getting a job are zero.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
Ques. 3A firm that has taken advantage of economies of scale and expanded to become the only producer in the market is
A) a cartel.
B) a natural monopoly.
C) a monopolistic competitor.
D) an oligopolist.
Ques. 4Public goods face the
A) principle of rival consumption.
B) free-rider problem.
C) law of overproduction.
D) exclusion principle.
Ques. 5An improvement in technology will shift the production possibilities curve
A) to the left.
B) along the curve.
C) inward.
D) to the right.
Ques. 6Public goods
A) are overproduced by unrestrained markets.
B) are simply private goods that the government provides.
C) cannot be consumed by more than one person without the degradation of the value of the good.
D) can be consumed by more than one person without degradation of the value of the good.
Ques. 7An example of foreign direct investment is the
A) domestic acquisition of less than 10 percent of a foreign company.
B) foreign purchase of more than 10 percent of stock in a domestic company.
C) purchase of livestock from abroad.
D) sale of insurance in a foreign nation.
Ques. 8Economics seeks to use only positive analysis to
A) provide a value-free analysis.
B) seek the best answer.
C) predict how people should act.
D) provide normative values.
Ques. 9Which of the following is likely among the most concentrated industries in the United States?
A) printing and publishing
B) soft drinks
C) tobacco products
D) household vacuum cleaners
Ques. 10Monopolistically competitive firms advertise to attempt to
A) lower their average variable costs.
B) build brand loyalty.
C) lower barriers to entry.
D) increase barriers to entry.
Ques. 11Total market supply can be derived by
A) horizontally summing individual supply curves at each and every price level.
B) vertically summing individual supply curves at the current technology level.
C) adding up the largest quantity demanded at various prices.
D) looking at the changes in the price of raw materials needed to produce the product.
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