Chapter 23 Flashcards Preview

Macro Economics > Chapter 23 > Flashcards

Flashcards in Chapter 23 Deck (25):
1

A monopolistically competitive industry has

A. many firms producing a differentiated product.

2

Which statement is true #1?
A. The monopolistic competitor alwasy makes a profit in the short run.
B. The Monopolistic competitor operates at peak efficiency
C. Product differentiation takes place in the minds of the buyers.
D. None of these statements is true.

C. Product differentiation takes place in the minds of the buyers.

3

Price discrimination

C. occurs when a seller charge two or more prices for the same good or service.

4

Which statement is ture about the monopolistic competitor in the long run?

D. It will be breaking even.

5

Price discriminations means

A. charging different prices for identical goods that have identical production costs.

6

Through product differentiation, firms attempt to increase the

A. demands for their products, while making its demand less elastic

7

Which of the follwing would NOT cause the costs in a monopolistically competitive industry to be higher than those in a competitive industry?

B. A large numer of competitors

8

An important result in long-run equilibrium in monopolistic competition is that the equilibrium point results in

B. price=ATC

9

Which is NOT a characteristic of monopolistic competition?

A. Each firm must take into account the actions of its rivals

10

Which statement is true #2?
A. The monopoilist has more elastic demand curve than the monopolistic competitor
B. The monopolistic competitor has a more elastic demand curve than the monopolist.
C. The monopolist and the monopolistic competitor have identical demand curves.
D. None of the statements are true.

B. The monopolistic competitor has a more elastic demand curve than the monopolist.

11

Statement I. The airlines often engage in price discrimination.
Statement II. Price discrimination occurs when a seller charges two or more prices for the same good or service.

C. Both statements are true.

12

__________ is the crucial characteristic of monopolistic competition.

A. Product differentiation

13

The typical monopolistic competitor

D. may compete on the basis of convenience, service, and ambience.

14

Which is the most accurate statement?

C. Most firms in the United States are monopolistic competitors.

15

Product differentiation is _____ based on real physical differences amount products.

B. sometimes

16

Product differentiation

A. takes place in the minds of the buyers

17

The typical monopolistic competitor

B. may be a drugstore, restaurant, gas station, or dry cleaner.

18

Monopolistic competition is similar to perfect competition for all of the following reasons except

B. both have identical demand and marginal revenue curves.

19

Monopolistic competition may lead to each of the following except

C. peak efficiency

20

Which statement is true #3?
A. The monopolistic competitor breadks even in the long run.
B. the monopolistick competitor operates at an output that is less than peack efficiency.
C. The monopolistic competitor has a small influence on price becuase its product are differentiated.
D. Monopolistic competitors have very elastic demand curves.
E. All of the choices are true.

E. All of the choices are true.

21

In general, it is fair to say that Americans are prodvided with

A. a greater amount of product differentiation than people in most other countryies

22

Which of the follwing is NOT an example of product differentiation?

C. Corn from an Iowa cornfield vs. corn from an Illinois cornfield.

23

An industry that has many firms productin a differentiated product would be classified as

C. monopolistically competitive

24

Providing better service, ambience, or a convenience location are all forms of

B. product differentiation

25

Each of the following is an example of price discrimincation except

B. expensive blood tests in a medical lab for well-to-do medical patients.