UNIVERSITY / INSTITUTE: Purdue University
CLASS / COURSE: ECON 25100: Microeconomics
1. Monopolistic competition means:
A. a market situation where competition is based entirely on product differentiation and advertising.
B. a large number of firms producing a standardized or homogeneous product.
C. many firms producing differentiated products.
D. a few firms producing a standardized or homogeneous product.
2. The restaurant, legal assistance, and clothing industries are each illustrations of:
A. countervailing power.
B. homogeneous oligopoly.
C. monopolistic competition.
D. pure monopoly.
3. If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes:
A. the likelihood of realizing economic profits in the long run would be enhanced.
B. individual firms would now be operating at outputs where their average total costs would be higher.
C. the industry would more closely approximate pure competition.
D. the likelihood of collusive pricing would increase.
4. 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?
A. Subway Sandwiches
B. Pittsburgh Plate Glass
C. Ford Motor Company
5. A monopolistically competitive firm has a:
A. highly elastic demand curve.
B. highly inelastic demand curve.
C. perfectly inelastic demand curve.
D. perfectly elastic demand curve.
6. The automobile, household appliance, and automobile tire industries are all illustrations of:
A. homogeneous oligopoly.
B. monopolistic competition.
C. pure monopoly.
D. differentiated oligopoly.
7. Oligopolistic industries are characterized by:
A. a few dominant firms and substantial entry barriers.
B. a few dominant firms and no barriers to entry.
C. a large number of firms and low entry barriers.
D. a few dominant firms and low entry barriers.
8. In an oligopolistic market:
A. one firm is always dominant.
B. products may be standardized or differentiated.
C. the four largest firms account for 20 percent or less of total sales.
D. the industry is monopolistically competitive.
9. The term oligopoly indicates:
A. a one-firm industry.
B. many producers of a differentiated product.
C. a few firms producing either a differentiated or a homogeneous product.
D. an industry whose four-firm concentration ratio is low.
10. In which of these continuums of degrees of competition (highest to lowest) is oligopoly properly placed?
A. pure competition, oligopoly, pure monopoly, monopolistic competition
B. oligopoly, pure competition, monopolistic competition, pure monopoly
C. monopolistic competition, pure competition, pure monopoly, oligopoly
D. pure competition, monopolistic competition, oligopoly, pure monopoly
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SUBJECTS / CATEGORIES:
1. Business Economics
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