1.Refer to the above data. The marginal cost column reflects:a.the law of diminishing returnsb.the law of diminishing marginal utilityc.diseconomies of scaled.economies of scale2.A purely competitive firm?s short-run supply curve is:a.The upward slopping portion of its marginal cost curveb.The upward sloping portion of its average variable cost curve.c.Its marginal cost curve above average variable cost.d.Its average total cost curve.3.Long-run competitive equilibrium:a.Is realized only in constant- cost industries.b.Will never change once it is realizedc.Is not economically efficientd.Results in zero economic profits4.Which of the following statement is correct?a.Economic profits induce firms to enter an industry; losses encourage firm to leave.b.Economic profits induce firms to enter an industry; profits encourage firm to leave.c.Economic profits and losses have no significant impact on the growth or decline of an industry.d.Normal profits will cause an industry to expand.5.Suppose losses cause industry X to contract and, as a result, the prices of relevant inputs decline. Industry X is:a.A constant-cost industry.b.A decreasing-cost industry.c.An increasing-cost industry.d.Encountering X-inefficiency6.Resources are efficiently allocated when production occurs where:a.Marginal cost equals variable cost.b.Prices is equal to average revenuec.Prices is equal to marginal costd.Prices is equal to average variable cost7.For an imperfectly competitive firm:a.Total revenue is a straight, upsloping line because a firm?s sales are independent of product priceb.The marginal revenue curve lies above the demand curve because any reduction in price applies to all units sold.c.The marginal revenue curve lies below the demand curve because any reduction in price applies to all units soldd.The marginal revenue curve lies below the demand curve because any reduction in price applies only to the extra units sold.1.Refer to above diagram. The quantity difference between areas A and C for the indicated price reduction measures:a.Marginal costb.Marginal revenuec.Monopoly priced.A welfare or efficiency loss2.A nondiscrimination monopolist:a.Will never produce in the output range where marginal revenue is positive.b.Will never produce in the output range where demand is inelasticc.Will never produce in the output range where demand is elasticd.May produce where demand is either elastic or inelastic, depending on the level of production costs3.The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist?s demand curve measures:a.The quantity demandedb.Product price and marginal revenuec.Total revenued.Product price and average revenue4.A pure monopolist:a.Will realize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of outputb.Will realize an economic profit if ATC exceeds MR at the profit-maximizing/loss-minimizing level of outputc.Will realize an economic loss if MC intersects the downsloping portion of MRd.Always realizes an economic profit5.When a pure monopolist is producing its profit-maximizing output, price will:a.Be less than MRb.Equal neither MC nor MRc.Equal MPd.Equal MC6.The supply curve for a monopolist is:a.Perfectly elasticb.Upslopingc.That portion of the marginal cost curve lying above minimum average variable cost.d.Nonexistent7.Which of the following statement is correcta.The pure monopolist will maximize profit by producing at that point on the demand curve where elasticity is zerob.In seeking the profit-maximizing output the pure monopolist underallocates resources to its productionc.The pure monopolist maximizes profits by producing that output at which the differential between price and average cost is the greatestd.Purely monopolistic sellers earn only normal profits in the long run1.Refer to the above long-run cist diagram for a firm. If the firm produces output Q1 at an average total cost of ATC1, then firm is:a.Producing the profit-maximizing output, but is failing to minimize production costs.b.Incurring X-inefficiency, but is realizing all existing economies of scalec.Incurring X-inefficiency and is failing to realize all existing economies of scale.d.Producing that output with the most efficient combination of inputs and is realizing all economies of scale.2.The dilemma of regulation refers to the idea that:a.The regulated price which achieves allocative efficiency is also likely to result in persistent economic profits.b.The regulated price which results in a ?fair return? restricts output by more than would unregulated monopoly.c.Regulated pricing always conflicts with the ?due process? provision of the Constitution.d.The regulated price which achieves allocative efficiency is also likely to result in losses.3.The monopolistically competitive seller?s demand curve will become more elastic the:a.More significant the barriers to entering the industry.b.Greater the degree of product differentiation.c.Larger the number of competitors.d.Smaller the number of competitors.