Forums > Main > Economics > Economics Basic Questions need help with them

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Old May 29th, 2011, 10:32 PM   #1
Join Date: May 2011
Posts: 1
Hey all, I have been working hard on these questions for days and I cant seem to find the answers and I have come to you guys for some help. I have honestly tried and now I'm stumped and if I don't pass this I cant move on to the next course, will you take a look at the questions below and see if you can help please?
Thanks in advance

Question 1

An oligopolistic market is consistent with:

a. All firms making economic profits

b. A small number of firms in the industry

c. The existence of barriers to entry

d. All of the above

Question 2

The benefit of the mixed strategy is:

a. the element of consistency that baffles the rivals.

b. lower returns for both players in the markets.

c. higher returns for both players in the market.

d. the element of surprise that baffles the rivals

Question 3

In a Nash equilibrium, firms are clearly strategically interdependent and:

a. they determine price in a closed auction bid system.

b. they are dependent on differentiated goods.

c. they are non-cooperative in determining market outcomes.

d. they cooperate with each other to determine market outcomes.

Question 4

Economists tend to focus on one structural aspect of market organization that is more important than the others. It is:

a. product homogeneity or differentiation.

b. the quality of market information.

c. the number of buyers and sellers.

d. entry and exit conditions.

Question 5

Elmer’s Glue has captured the market for school glue. It is preferred by both students and parents alike. It takes very little capitalization to enter the market but nobody successfully does. The glue clearly needs no patents or secret formulas. This type of market is called:

a. monopoly.

b. oligopoly.

c. pure or perfect competition.

d. monopolistic competition.

Question 6

A dominant strategy is one where the one firm picks:

a. a strategy no matter what the rival does.

b. a strategy that must be repeated.

c. a strategy only after seeing the other firm’s decision.

d. the same the strategy as the rival

Question 7

A market where a few firms produce most of the output or sales is called:

a. oligopolistic.

b. monopolistic.

c. perfectly competitive.

d. monopolistically competitive.

Question 8

A monopoly is most likely to emerge and be sustained when:

a. Firms have U-shaped, average-total-cost curves

b. Output demand is relatively elastic

c. Fixed capital costs are small relative to total costs

d. Economies of scale are large relative to market demand

Question 9

For the perfectly or purely competitive firm, profit maximization occurs at an output level where:

a. P = AVC

b. MC = ATC.

c. P < AVC.

d. P = MC

Question 10

The market for micro-computers (PCs) is fairly competitive, the products are somewhat homogeneous, and, over time, firms have entered looking to make profits on new configurations of the micro-computer. Over time, profits:

a. are not important since this industry is in the nonprofit sector.

b. have stayed about the same for most firms.

c. have become razor thin for many producers.

d. have risen dramatically.

Question 11

Which is a characteristic of monopolistic competition?

a. Standardized product

b. Absence of nonprice competition

c. Relatively easy entry

d. A relatively small number of firms

Question 12

If a firm is earning a large economic profit and the firm operates in a fairly competitive market, then, over time:

a. new firms will enter and prices will fall.

b. old firms will exit and prices will rise.

c. new firms will enter and prices will rise.

d. old firms will exit and prices will fall.

Question 13

Under monopoly, there are:

a. the advantages of heterogeneous products.

b. many competitors.

c. unexploited gains from trade (or, inefficiencies).

d. problems of easy entry.

Question 14

A necessary condition for market power to exist for a particular company in a market is that:

a. the number of firms is over 150.

b. information must be understood by both buyers and sellers.

c. effective barriers to entry must exist.

d. consumers perceive all products as homogeneous.

Question 15

In a monopolistically competitive market, the advantage that a seller has over competitors or newcomers is:

a. the license or patent.

b. consumer preference for its brand.

c. economies of scale.

d. low costs from the learning curve effect.

Question 16

For any company operating in a marketplace, the firm attempts to maximize the value of company’s worth by setting output where:

a. MR = MC.

b. AR = MC.

c. P < AVC.

d. costs are lowest.

Question 17

Sometimes an old company in an industry can build a larger plant that has lower costs per unit than a potential entrant (newcomer) can duplicate. That is market:

a. weakness based on reputation deficiency.

b. power based on specific assets.

c. power based on scale economies.

d. weakness based on cost.

Question 18

The Prisoner’s Dilemma and the problem of the cartel are very similar. In both cases:

a. non-cooperation is an instable solution.

b. non-cooperation would improve the outcome, but it rarely happens.

c. cooperation is the only solution.

d. cooperation would improve the outcome, but it rarely happens.

Question 19

Though Nash games are noncooperative, a cooperative outcome is more likely if

a. long run gains are greater than short run gains.

b. firms can easily monitor the outcomes from cooperation.

c. firms expect the market relationship to last a long time.

d. All of the above.

Question 20

Which is most characteristic of a pure monopoly?

a. Exit from the industry is blocked but entry into the industry is relatively easy

b. There is a dominant firm in a multifirm industry

c. The firm has considerable control over the quantity of the output produced, but not over price

d. The firm produces a good or a service for which there are no close substitutes
Old May 31st, 2011, 01:58 PM   #2
Join Date: Jan 2009
Location: Miami
Posts: 1,051
Dont be lazy. I wont do your homework for you.

If you dont dare to solve those simple elementary economic questions you should not be in college.
Old May 31st, 2011, 02:08 PM   #3
Join Date: Feb 2004
Posts: 2,600
I could give you some answers.. but somehow I can guarantee you that a classically trained economist would say all my answers were false..
Old May 31st, 2011, 04:45 PM   #4
Join Date: Aug 2003
Posts: 4,121
Micro blah, just read the book.

How about something more interesting, like:

Suppose that the number of energy drinks demanded and supplied is given by the following equations

Qd= 35,000 - 5000P

Qs= -10,000 + 4000P

1. What is the equilibrium price?
2. What is the equilibrium quantity?
Old May 31st, 2011, 05:13 PM   #5
Join Date: Oct 2006
Posts: 690
If you understand what monopoly means you could get a C in this test without having read an economics book in your life.
Old May 31st, 2011, 08:45 PM   #6
Join Date: Jun 2005
Posts: 7,509
Quote from vote4pedro:

I have honestly tried and now I'm stumped and if I don't pass this I cant move on to the next course...
If you cant pass this, you SHOULDNT move on to the next course. Sorry to sound mean, but you either need to try harder to learn this stuff yourself, or admit that you are just not smart enough to understand economics and you should drop it and take another course. Maybe culinary arts, or auto repair might be more up your alley. Maybe even be a medical assistant. If all else fails, there is always McDonalds, just dont let them put you as a cashier.
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