#1
What is a common characteristic of a perfectly competitive market?
A small number of firms
Product differentiation
Price-taking behavior
High barriers to entry
#2
Which of the following is an example of a fixed cost for a firm?
Cost of raw materials
Hourly wages for temporary workers
Property rent
Electricity bill
#3
What is the main goal of profit maximization for a firm?
To achieve the highest possible revenue
To minimize costs
To maximize the difference between total revenue and total cost
To achieve market dominance
#4
Which of the following is NOT a characteristic of a monopoly?
Single seller
Product differentiation
Price-maker
High barriers to entry
#5
Which of the following is a characteristic of a natural monopoly?
High barriers to entry
Many small firms
Homogeneous products
Price-taking behavior
#6
What does the term 'marginal revenue' represent for a firm?
The additional revenue from selling one more unit of output
The total revenue from selling all units of output
The average revenue per unit of output
The revenue necessary to cover variable costs
#7
In economics, what is the term used to describe the total revenue minus explicit costs?
Economic profit
Accounting profit
Normal profit
Opportunity cost
#8
What does the term 'economies of scale' refer to?
Decrease in average total cost as production quantity increases
Increase in variable costs as production quantity increases
Increase in average fixed cost as production quantity decreases
Decrease in marginal cost as production quantity decreases
#9
Which market structure is characterized by a small number of large firms dominating the market?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
#10
What is the formula for calculating marginal cost?
Change in total cost divided by change in quantity
Total cost divided by quantity
Change in total revenue divided by change in quantity
Total revenue divided by quantity
#11
Which of the following is NOT a characteristic of monopolistic competition?
Many buyers and sellers
Product differentiation
Price-taking behavior
Some control over price
#12
What is the relationship between marginal cost and average total cost when marginal cost is below average total cost?
Marginal cost is increasing and greater than average total cost
Marginal cost is decreasing and greater than average total cost
Marginal cost is increasing and less than average total cost
Marginal cost is decreasing and less than average total cost
#13
Which of the following is a characteristic of a firm operating in a perfectly competitive market in the long run?
Positive economic profit
Zero economic profit
Negative economic profit
Variable costs exceed total revenue
#14
What is the main characteristic of a monopolistically competitive market?
Homogeneous products
Price-taking behavior
Perfect information
Product differentiation
#15
In the long run, a perfectly competitive firm will produce at which point?
Where marginal cost equals marginal revenue
Where average total cost is minimized
Where price equals marginal cost
Where average variable cost equals price
#16
What is the main reason for a firm to engage in price discrimination?
To reduce costs
To increase consumer surplus
To achieve perfect competition
To capture consumer surplus
#17
What is the term used to describe the situation where a firm produces at the lowest possible cost per unit of output?
Productivity maximization
Cost minimization
Profit maximization
Economies of scale
#18
Which of the following is a characteristic of oligopoly?
High barriers to entry
Price-taking behavior
Homogeneous products
Many firms
#19
What is a characteristic of a firm operating in a monopolistically competitive market in the long run?
Economic profit equal to zero
Economic profit greater than zero
Economic profit less than zero
Economic profit equals fixed costs