A market structure in which many firms compete by making similar but slightly different products is called
A) perfect competition.
B) monopolistic competition.
C) oligopoly.
D) monopoly.
Ques. 2An individual perfectly competitive firm has a supply curve
A) with a positive slope.
B) with a negative slope.
C) that is parallel to the quantity axis.
D) that has a positive slope at lower output levels and a negative slope at higher output levels.
Ques. 3To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The deadweight loss created by this tax would be greater than shown in the figure above if
A) the demand were more elastic.
B) the supply were more elastic.
C) neither of the above.
D) both A and B above.
Ques. 4Melissa has an income of 240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is 20, and the price of a concert ticket is 40. The slope of Melissa's budget line, with tennis lessons on the horizontal axis, is
A) -2.
B) -0.5.
C) -6.
D) -12.
Ques. 5The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay the same when
A) its demand and supply both increase.
B) its demand increases and supply decreases.
C) its demand decreases and supply increases.
D) its demand and supply both decrease.
Ques. 6Diminishing marginal utility of wealth leads to risk aversion because at a given level of wealth a dollar gained
A) is worth more in additional utility than a dollar lost.
B) is worth less in additional utility than a dollar lost.
C) is worth as much in additional utility as a dollar lost.
D) does not add to total utility.
Ques. 7The free-rider problem is the reason way private markets are unlikely to achieve the efficient level of production of
A) normal goods.
B) excludable goods.
C) public goods.
D) private goods.
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