Question 1

How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?

Accepted Answer

By marketing to single women,a cigar bar

Question 2

Figure 13-17  
-Refer to Figure 13-17.What is the allocatively efficient output for the firm represented in the diagram?

Accepted Answer

A)  Qf units 
B)  Qg units 
C)  Qh units 
D)  Qj units 
A)  Qf units 
B)  Qg units 
C)  Qh units 
D)  Qj units

Question 3

Consumers benefit from monopolistic competition by

Accepted Answer

A)  being able to choose from products more closely suited to their tastes. 
B)  paying the lowest possible price for the product. 
C)  paying the same price as everyone else. 
D)  being able to purchase high-quality products at low prices. 
A)  being able to choose from products more closely suited to their tastes. 
B)  paying the lowest possible price for the product. 
C)  paying the same price as everyone else. 
D)  being able to purchase high-quality products at low prices.

Question 4

Monopolistically competitive firms achieve allocative efficiency but not productive efficiency.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following characteristics is not common to monopolistic competition and perfect competition?

Accepted Answer

A)  Firms act to maximize profit. 
B)  Entry barriers into the industry are low. 
C)  The market demand curve is downward -sloping. 
D)  Firms take market prices as given. 
A)  Firms act to maximize profit. 
B)  Entry barriers into the industry are low. 
C)  The market demand curve is downward -sloping. 
D)  Firms take market prices as given.

Question 6

The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because

Accepted Answer

A)  barriers to entry are very low. 
B)  there are many firms in the market. 
C)  products are differentiated. 
D)  entry into the market is blocked. 
A)  barriers to entry are very low. 
B)  there are many firms in the market. 
C)  products are differentiated. 
D)  entry into the market is blocked.

Question 7

A monopolistically competitive firm chooses

Accepted Answer

A)  both the quantity of output to produce and the price at which it will sell its output. 
B)  the price of the product it sells but market forces determine the quantity it will be able to sell. 
C)  the quantity of output to produce but the price of the product it sells is determined collectively by all firms in the industry. 
D)  the price of the product it sells but the quantity of output to produce is agreed upon by all firms in the industry. 
A)  both the quantity of output to produce and the price at which it will sell its output. 
B)  the price of the product it sells but market forces determine the quantity it will be able to sell. 
C)  the quantity of output to produce but the price of the product it sells is determined collectively by all firms in the industry. 
D)  the price of the product it sells but the quantity of output to produce is agreed upon by all firms in the industry.

Question 8

A monopolistically competitive firm maximizes profit in the short run by producing where

Accepted Answer

A)  price is less than marginal cost. 
B)  price is less than marginal revenue. 
C)  price is less than average revenue. 
D)  price is greater than marginal cost. 
A)  price is less than marginal cost. 
B)  price is less than marginal revenue. 
C)  price is less than average revenue. 
D)  price is greater than marginal cost.

Question 9

When a monopolistically competitive firm cuts its price to increase its sales,it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the best example of a firm that competes in a monopolistically competitive market?

Accepted Answer

A)  the U.S. Postal Service 
B)  Microsoft 
C)  a movie theater 
D)  an automobile manufacturer 
A)  the U.S. Postal Service 
B)  Microsoft 
C)  a movie theater 
D)  an automobile manufacturer

Question 11

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

Accepted Answer

No.Although monopolistically competitive

Question 12

Explain the differences between total revenue,average revenue,and marginal revenue.

Accepted Answer

Total revenue equals price × q

Question 13

A firm that successfully differentiates its product or lowers its average cost of production creates

Accepted Answer

A)  value for its customers. 
B)  entry barriers into its market. 
C)  a perfectly inelastic demand curve for its product. 
D)  economies of scale. 
A)  value for its customers. 
B)  entry barriers into its market. 
C)  a perfectly inelastic demand curve for its product. 
D)  economies of scale.

Question 14

Table 13-1
  
-Refer to Table 13-1.What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

Accepted Answer

A)  output effect = $3.00; price effect = $0.50 
B)  output effect = $1.50; price effect = $2.00 
C)  output effect = $5.50; price effect = -$2.00 
D)  output effect = $4.00; price effect = -$0.50 
A)  output effect = $3.00; price effect = $0.50 
B)  output effect = $1.50; price effect = $2.00 
C)  output effect = $5.50; price effect = -$2.00 
D)  output effect = $4.00; price effect = -$0.50

Question 15

Which of the following is true of trademarks?

Accepted Answer

A)  A successful trademark is one that becomes a generic name for a product, for example, "Xerox" has become a generic term for making photocopies. 
B)  A successful trademark is one that allows consumers to immediately identify the source or producer of the product. 
C)  If a firm is granted a trademark, then no other firms can legally produce similar products for a given period of time. 
D)  If a firm is granted a trademark, then no other firms can legally sell in the same geographic area for a given period of time. 
A)  A successful trademark is one that becomes a generic name for a product, for example, "Xerox" has become a generic term for making photocopies. 
B)  A successful trademark is one that allows consumers to immediately identify the source or producer of the product. 
C)  If a firm is granted a trademark, then no other firms can legally produce similar products for a given period of time. 
D)  If a firm is granted a trademark, then no other firms can legally sell in the same geographic area for a given period of time.

Question 16

Figure 13-4   Figure 13-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 13-4.What is the area that represents the total variable cost of production?

Accepted Answer

A)  0P0aQa 
B)  0P1bQa 
C)  P0abP1 
D)  P1bdP3 
A)  0P0aQa 
B)  0P1bQa 
C)  P0abP1 
D)  P1bdP3

Question 17

According to a Wall Street Journal article,hhgregg has differentiated itself from its competition,particularly from large chain stores such as Best Buy

Accepted Answer

A)  by charging lower prices. 
B)  by providing better customer service. 
C)  by selling inferior products. 
D)  by offering discounts for cash sales. 
A)  by charging lower prices. 
B)  by providing better customer service. 
C)  by selling inferior products. 
D)  by offering discounts for cash sales.

Question 18

Table 13-2
   Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 13-2 shows the firm's demand and cost schedules.
-Refer to Table 13-2.What is likely to happen to the product's price in the long run?

Accepted Answer

A)  It will fall. 
B)  It will increase. 
C)  It will remain constant. 
D)  This cannot be determined without information on its long-run demand curve. 
A)  It will fall. 
B)  It will increase. 
C)  It will remain constant. 
D)  This cannot be determined without information on its long-run demand curve.

Question 19

Figure 13-19  
-Refer to Figure 13-19 to answer the following questions.
a.What is the productively efficient output?
b.What is the allocatively efficient output?
c.What is the amount of excess capacity?
d.Suppose the firm is currently producing 14 units.What happens if it increases output to 17 units?

Accepted Answer

a.The productively efficient output is 2

Question 20

If price exceeds average variable cost but is less than average total cost,a firm

Accepted Answer

A)  should further differentiate its product. 
B)  should stay in business for a while longer until its fixed costs expire. 
C)  is making some profit but less than maximum profit. 
D)  should shut down. 
A)  should further differentiate its product. 
B)  should stay in business for a while longer until its fixed costs expire. 
C)  is making some profit but less than maximum profit. 
D)  should shut down.

How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?

Figure 13-17 -Refer to Figure 13-17.What is the allocatively efficient output for the firm represented in the diagram?

Consumers benefit from monopolistic competition by

Monopolistically competitive firms achieve allocative efficiency but not productive efficiency.

Which of the following characteristics is not common to monopolistic competition and perfect competition?

The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because

A monopolistically competitive firm chooses

A monopolistically competitive firm maximizes profit in the short run by producing where

When a monopolistically competitive firm cuts its price to increase its sales,it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect.

Which of the following is the best example of a firm that competes in a monopolistically competitive market?

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

Explain the differences between total revenue,average revenue,and marginal revenue.

A firm that successfully differentiates its product or lowers its average cost of production creates

Table 13-1 -Refer to Table 13-1.What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

Which of the following is true of trademarks?

Figure 13-4 Figure 13-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-4.What is the area that represents the total variable cost of production?

According to a Wall Street Journal article,hhgregg has differentiated itself from its competition,particularly from large chain stores such as Best Buy

Table 13-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 13-2 shows the firm's demand and cost schedules. -Refer to Table 13-2.What is likely to happen to the product's price in the long run?

If price exceeds average variable cost but is less than average total cost,a firm

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 13: Monopolistic Competition: the Competitive Model in a More Realistic Setting

How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?

Figure 13-17 -Refer to Figure 13-17.What is the allocatively efficient output for the firm represented in the diagram?

Consumers benefit from monopolistic competition by

Monopolistically competitive firms achieve allocative efficiency but not productive efficiency.

Which of the following characteristics is not common to monopolistic competition and perfect competition?

The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because

A monopolistically competitive firm chooses

A monopolistically competitive firm maximizes profit in the short run by producing where

When a monopolistically competitive firm cuts its price to increase its sales,it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect.

Which of the following is the best example of a firm that competes in a monopolistically competitive market?

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

Explain the differences between total revenue,average revenue,and marginal revenue.

A firm that successfully differentiates its product or lowers its average cost of production creates

Table 13-1 -Refer to Table 13-1.What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

Which of the following is true of trademarks?

Figure 13-4 Figure 13-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-4.What is the area that represents the total variable cost of production?

According to a Wall Street Journal article,hhgregg has differentiated itself from its competition,particularly from large chain stores such as Best Buy

Table 13-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 13-2 shows the firm's demand and cost schedules. -Refer to Table 13-2.What is likely to happen to the product's price in the long run?

If price exceeds average variable cost but is less than average total cost,a firm

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters