Econ Final exam

Both monopolies and competitive firms

• are price takers

• are price makers

• face barriers to entry

• make long-run economic profits

• try to maximize profits

Which of the following characteristics best defines a private good?

• Rival and excludable

• Rival and non-excludable

• Non-rival and non-excludable

• Non-rival and excludable

A free-rider problem exists when:

• People receive a benefit for which they do not need to pay

• Firms impose a cost on third parties

• Negative externalities exist

• A private good is produced

• Any market is in equilibrium

In the perfect competition market structure,

• The market demand curve is horizontal

• The single firm faces a horizontal demand curve

• The single firm faces a downward-sloping demand curve.

• The market demand curve is downward sloping.

• B & D

The perfectly competitive firm will seek to produce the level of output for which

• average variable cost is at a minimum

• average total cost is at a minimum

• average fixed cost is at a minimum

• marginal cost equals marginal revenue

A perfectly competitive firm should increase its level of production as long as

• total revenue is less than total cost

• the total revenue curve is rising

• marginal revenue is greater than the marginal cost

• marginal revenue curve is rising

Costs that do not change with output are called _______ costs.

• marginal

• average

• fixed

• variable

• long-run

If the consumption of a good by one person reduces the amount of it that can be consumed by others, the good is

• excludable

• non-excludable

• rival in consumption

• non-rival in consumption

Marginal product is the change in:

• total output divided by the change in input

• total output plus the change in input

• total output minus the change in input

• total output times the change in imput

a club good is:

• both rival in consumption and excludable

• neither rival in consumption nor excludable

• rival in consumption but not excludable

• non-rival in consumption but excludable