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    General Micro-Economics: 14 Multiple Choice

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    1. Price discrimination is _____.
    illegal in most economically developed nations
    very rare in a market economy
    common, and evidence of monopoly
    all of the above

    2. Market power is the ability _____.
    to set prices and quantities sold
    of capitalists to exploit the working classes
    to set prices
    all of the above

    3. Which of the items below are examples of monopolistic competition, also known as imperfect competition?
    patent, copyright, and trademark
    professional licensing and labor unions
    local shops and restaurants
    all of the above
    none of the above

    4. In what kind of market is a firm unable to influence the price of its output? (Points: 4)
    price maker
    monopoly
    imperfect monopoly
    perfectly competitive

    5. When the quantity sold of a good changes significantly in response to changes in price, its demand is _____.
    identical to his supply curve
    identical to marginal cost
    highly elastic
    highly inelastic

    6. Different individuals can earn different incomes because _____.
    they are discriminated against, based on ethnicity, gender, race, or other traits
    they have different levels of education and experience
    they live in different geographic areas with different employment opportunities
    any or all of the above could be reasons

    7. When a firm's revenues rise more quickly than its costs, _____.
    it is operating below its optimal capacity
    it is operating above its optimal capacity
    it is operating at its optimal capacity
    all of the above

    8. The primary goal of a firm is to _____.
    minimize cost
    maximize revenue
    maximize profit
    all of the above

    9. Which of the following most nearly approximates a perfectly competitive market?
    products with brand names that are sold in many different stores
    commodities, like wheat, rice, and gold
    products that are very close substitutes for each other, like Coke and Pepsi
    all of the above

    10. Profit equals _____.
    total revenue minus total cost
    total revenue minus marginal cost
    marginal revenue minus marginal cost
    gross revenue minus depreciation

    11. Marginal cost is _____.
    a small cost that does not affect a firm's profit significantly
    the cost of increasing the margin between cost and price
    the cost of producing the next unit of output
    all of the above

    12. A good that can be reproduced and distributed at a zero marginal cost is an example of _____.
    public good
    commodity
    oligopoly good
    monopoly good

    13. The "Prisoner's Dilemma" illustrates:
    The lack of cooperation among firms in a competitive market
    The lack of cooperation among firms in a monopolistic market
    The lack of cooperation between a monopoly and its customers
    why, in an oligopoly market, cooperation is difficult to achieve even when it is mutually beneficial

    14. A very large advertising budget is typically a sign of _____.
    public good
    perfect competition
    oligopoly
    monopoly

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    https://brainmass.com/economics/demand-supply/general-micro-economics-14-multiple-choice-268451

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