devry econ 312 week 3 quiz

(TCO 3) Which of the following constitutes an implicit cost to the Johnston Manufacturing Company?

Payments of wages to its office workers

Rent paid for the use of equipment owned by the Schultz Machinery Company

Use of savings to pay operating expenses instead of generating interest income

Economic profits resulting from current production

Question 2. Question :

(TCO 3) To economists, the main difference between the short run and the long run is that

the law of diminishing returns applies in the long run, but not in the short run.

in the long run all resources are variable, while in the short run at least one resource is fixed.

fixed costs are more important to decision making in the long run than they are in the short run.

in the short run all resources are fixed, while in the long run all resources are variable.

Question 3. Question :

(TCO 3) Which of the following industries most closely approximates pure competition?

Agriculture

Farm implements

Clothing

Steel

Question 4. Question :

(TCO 3) Which of the following statements applies to a purely competitive producer?

It will not advertise its product.

In long-run equilibrium it will earn an economic profit.

Its product will have a brand name.

Its product is slightly different from those of its competitors.

Question 5. Question :

(TCO 3) Which of the following is correct?

Both purely competitive and monopolistic firms are "price takers."

Both purely competitive and monopolistic firms are "price makers."

A purely competitive firm is a "price taker," while a monopolist is a "price maker."

A purely competitive firm is a "price maker," while a monopolist is a "price taker."

Question 6. Question :

(TCO 3) Barriers to entering an industry

encourage allocative efficiency.

encourage productive efficiency.

are the basis for monopoly.

apply only to purely monopolistic industries.

Question 7. Question :

(TCO 3) The restaurant, legal assistance, and clothing industries are each illustrations of

countervailing power.

homogeneous oligopoly.

monopolistic competition.

pure monopoly.

Question 8. Question :

(TCO 3) Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a monopolistic competitor?

Subway Sandwiches

Pittsburgh Plate Glass

Ford Motor Company

Microsoft

Question 9. Question :

(TCO 3) Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a differentiated oligopolist in a highly concentrated industry?

Subway Sandwiches

US Steel

Ford Motor Company

Alcoa Aluminum

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(TCO 3) If the four-firm concentration ratio for industry X is 80

the four largest firms account for 80% of total sales.

each of the four largest firms accounts for 20% of total sales.

the four largest firms account for 20% of total sales.

the industry is monopolistically competitive.

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Question 11. Question :

(TCO 3) What is the LAW OF DIMINISHING RETURNS, and why is this law considered a short-run phenomenon?

Question 12. Question :

(TCO 3) Identify the primary characteristics of monopolistic competition and oligopoly. Give examples of each.