A(n) ____ may offer products that are either differentiated or identical.
a. monopolistically competitive firm
b. monopolist
c. oligopolistic firm
d. perfectly competitive firm
e. monopsonist
QUESTION 2When perfectly competitive firms in an industry are earning positive economic profits,
a. we would expect entry into the industry.
b. we would expect stability in the industry, since it is in long run equilibrium.
c. we would expect exit from the industry.
d. we do not know whether there would tend to be entry, exit, or stability in the industry.
QUESTION 3The theory of comparative advantage is based on:
a. absolute opportunity costs.
b. relative opportunity costs.
c. total costs of production.
d. the number of units produced by a firm.
e. a comparison of marginal cost with average variable costs.
QUESTION 4The law that prohibits price from reaching its equilibrium point, by enforcing a maximum that is below equilibrium is called a _____ and results in a _____.
a. price ceiling; shortage
b. price ceiling; surplus
c. price floor; shortage
d. price floor; surplus
QUESTION 5Which of the following characteristics distinguishes oligopoly from other market structures?
a. Firms operating in an oligopoly are independent of each other.
b. Firms operating in an oligopoly are interdependent.
c. Oligopoly is the simplest of all the other market structures.
d. An oligopolist does not face a downward-sloping demand curve.
e. Entry into an oligopolistic market is easier than entry into a monopolistically competitive market.
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