Which of the following is the best example of an oligopoly?
a. Area restaurants.
b. The automobile industry.
c. Agricultural markets free of government support.
d. Local utilities.
QUESTION 2The short run is a time period such that:
a. the existing firms in the market do not have sufficient time to change the amounts of any of the inputs that they employ.
b. the existing firms in the market do not have sufficient time to either increase or decrease their current rate of output.
c. the existing firms in the market do not have sufficient time to increase the size of their existing plant or build a new factory.
d. new firms may build plants and enter the industry.
QUESTION 3Long-term growth in production in an economy can be partially explained by:
a. improvements in the rules of the game that facilitate production and exchange.
b. the peaks and troughs of the business cycle or economic fluctuations.
c. trade surpluses that lead to accumulations of precious metals.
d. federal government budget deficits.
e. a gradual but consistent increase in the price level.
QUESTION 4An oligopoly:
a. and monopolistically competitive market produce less and charge higher prices than if their markets were perfectly competitive.
b. is characterized by mutual interdependence of pricing decisions.
c. may be characterized by a kinked demand curve.
d. all of these.
QUESTION 5During the short-run period of the production process, a firm will be:
a. unable to vary any of its factors of production.
b. able to vary some of its factors of production.
c. able to vary all of its factors of production.
d. able to vary the size of its plant.
QUESTION 6Which of the following is true of a recessionary period?
a. It is usually accompanied by an improvement in the value of an economy's currency.
b. It is usually accompanied by low levels of inflation.
c. It is usually accompanied by a dramatic decline in the stock of inventories.
d. It usually lasts for a few months.
e. It leads to a drastic decline in government spending.
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