Question 1

Oligopoly and monopolistic competition are examples of a market structure called imperfect competition.

Accepted Answer

A) True 
 B)False

Question 2

Figure 16-6  
-Refer to Figure 16-6. Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is doing its best but still losing money?

Accepted Answer

A) panel a 
B) panel b 
C) panel c 
D) panel d 
A) panel a 
B) panel b 
C) panel c 
D) panel d

Question 3

The higher the concentration ratio, the

Accepted Answer

A) more control an individual firm has to set prices. 
B) more competitive the industry. 
C) less competitive the industry. 
D) Both a and c are correct. 
A) more control an individual firm has to set prices. 
B) more competitive the industry. 
C) less competitive the industry. 
D) Both a and c are correct.

Question 4

Select the type of market that is described by the following attributes: many firms, differentiated products, and free entry.

Accepted Answer

A) natural monopoly 
B) perfectly competition 
C) monopolistic competition 
D) monopoly 
A) natural monopoly 
B) perfectly competition 
C) monopolistic competition 
D) monopoly

Question 5

A monopolistically competitive market

Accepted Answer

A) is imperfectly competitive, and all imperfectly competitive markets are monopolistically competitive. 
B) is imperfectly competitive, but not all imperfectly competitive markets are monopolistically competitive. 
C) is imperfectly competitive, whereas an oligopolistic market is not imperfectly competitive. 
D) is not imperfectly competitive. 
A) is imperfectly competitive, and all imperfectly competitive markets are monopolistically competitive. 
B) is imperfectly competitive, but not all imperfectly competitive markets are monopolistically competitive. 
C) is imperfectly competitive, whereas an oligopolistic market is not imperfectly competitive. 
D) is not imperfectly competitive.

Question 6

Figure 16-10
The figure is drawn for a monopolistically-competitive firm.  
-Refer to Figure 16-10. If the firm were to produce 154.92 units of output,

Accepted Answer

A) efficient scale would be realized. 
B) ATC would be at its minimum value. 
C) the firm would sustain a loss of more than $2,000. 
D) All of the above are correct. 
A) efficient scale would be realized. 
B) ATC would be at its minimum value. 
C) the firm would sustain a loss of more than $2,000. 
D) All of the above are correct.

Question 7

Figure 16-11  
-Refer to Figure 16-11. If this firm profit-maximizes, how much profit or loss will it earn?

Accepted Answer

The answer of Figure 16-11  
-Refer to Figure 16-11....

Question 8

Table 16-6
Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's.  
-Refer to Table 16-6. If the government forced Beatrice's to produce at the efficient scale of output, what is the maximum profit Beatrice's could earn?

Accepted Answer

A) $59 
B) $67 
C) $101 
D) $126 
A) $59 
B) $67 
C) $101 
D) $126

Question 9

Monopolistically competitive markets may be socially inefficient because

Accepted Answer

A) most firms produce inferior products. 
B) government programs cannot effectively regulate price. 
C) firms earn zero economic profit. 
D) the market may have too much or too little entry by new firms. 
A) most firms produce inferior products. 
B) government programs cannot effectively regulate price. 
C) firms earn zero economic profit. 
D) the market may have too much or too little entry by new firms.

Exam 16: Monopolistic Competition

Oligopoly and monopolistic competition are examples of a market structure called imperfect competition.

Figure 16-6 -Refer to Figure 16-6. Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is doing its best but still losing money?

The higher the concentration ratio, the

Select the type of market that is described by the following attributes: many firms, differentiated products, and free entry.

A monopolistically competitive market

Figure 16-10 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-10. If the firm were to produce 154.92 units of output,

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much profit or loss will it earn?

Monopolistically competitive markets may be socially inefficient because

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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