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Final Exam Review - Economics

Total questions: 45

Worksheet time: 21mins

Name
Class
Date
1.

Which of the following is a possible cause of diseconomies of scale?

a)

similar businesses in the area

b)

easy access to suppliers

c)

greater distance between senior staff and shop floor workers

d)

abundance of skilled labour

2.

What of the following is a feature of a monopoly?

a)

There is plenty of competition

b)

Price is set freely by the consumers

c)

The product sold is unique

d)

There are very few barriers to entry

3.

The term "economies of scale" refers to ...

a)

the average costs of production decreasing as a firm expands

b)

the average costs of production rising as a firm expands

c)

the average costs of production remaining the same as a firm expands

d)

the average costs of production at first decreasing, then increasing, as a firm expands

4.

A market dominated by a few large firms is called:

a)

Oligopoly

b)

Labour Market

c)

Monopoly

d)

Government intervention

5.
Total Costs / Quantity = _____
a)
Marginal Cost
b)
Average Total Cost
c)
Implicit Cost
d)
Explicit Cost
6.
Change in Total Revenue/Change in Quantity
ΔTR/ΔQ = _____
a)
Marginal cost
b)
Marginal Revenue
c)
Profit
d)
Marginal Profit
7.
 Total Revenue - Total Cost = _____
a)

Profit/Loss

b)
Revenue
c)
Marginal Revenue
d)
Variable Revenue
8.
Costs that do not change when the quanity of output produced changes?
a)
Fixed Costs
b)
Variable Costs
c)
Explicit Costs
d)
Implicit Costs
9.
The market value of all the inputs a firm uses in production.
a)
Implicit Costs
b)
Explicit Costs
c)
Total Costs
d)
Marginal Costs
10.
Time period in which one of the costs is fixed?
a)
Long Run
b)
Short Run
11.
Additional cost associated by producing one additional unit of product.
a)
Fixed Costs
b)
Average Costs
c)
Marginal Costs
d)
Emplicit Costs
12.
The amount a firm receives for the sale of its output.
P x Q = _____
a)
Profit
b)
Total Revenue
c)
Marginal Revenue
d)
Average Profit
13.
Input costs that may not have a direct outlay of money.  Value of the opportunity cost.
a)
Fixed Cost
b)
Variable Cost
c)
Implicit Cost
d)
Explicit Cost
14.
Period of time in which all costs are variable.
a)
Long Run
b)
Short Run
15.
Revenue generated by producing one additional unit of product.
a)
Marginal Revenue
b)
Marginal Profit
c)
Total Revenue
d)
Average Revenue
16.
Measure of profit  which includes both explict and implicit costs.
a)
Economic Profit
b)
Accounting Profit
17.
The property whereby long-run average total cost rises as the quantity of output increases.
a)
Economies of Scale
b)
Effecient Scale
c)
Constant Returns to Scale
d)
Diseconomies of Scale
18.
Occurs when each addition of an input results in declining quantity of the output
a)
Diminishing Marginal Utility
b)
Diminishing Marginal Costs
c)
Diminishing Marginal Returns
d)
Diminishing Marginal Profits
19.

Product differentiation refers to

a)

Features that make one product appear different from competing products in the same market.

b)

The selling of identical products in different markets.

20.

Which of the following usually results from colluding firms?

a)

Less is produced

b)

Profit decreases

c)

Prices are higher

21.
The characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms:
a)
Advertise their products
b)
Consider each other's decisions
c)
Produce differentiated products
d)
Face high barriers to entry
22.
How many firms are in a monopoly? 
a)
one
b)
two
c)
three
d)
unlimited
23.

Going to the Dallas Farmers Market to buy apples, you will find this type of market structure.

a)

Monopoly

b)

Perfect Competition

c)

Monopolistic Competition

d)

Oligopoly

24.

Since the airline industry is controlled by only a few very big companies, which type of market structure would best describe it.

a)

Monopoly

b)

Perfect Competition

c)

Oligopoly

25.
A price war occurs when competing sellers________ their prices _____________________.
a)
drop, below the competition
b)
drop, above the competition
c)
raise, below the competition
d)
raise, below the competition
26.

Define collusion

a)

When two cars collide on the road

b)

a secret agreement between two competing firms to sell their similar products at the same price

27.
The jeans industry would fall into what type of market structure? ( jeans are similar but there are some differences in the product)
a)
monopoly
b)
oligopoly
c)
perfect competition
d)
monopolistic competition
28.

The total product is...

a)

Only the minimum quantity of labour

b)

The past expenditure on something that has no resale value

c)

The maximum output that a given quantity of labour can produce

29.

The time frame in which the quantities of ALL factors of production can be varied is...

a)

Short run

b)

Long run

c)

Sunk Cost

d)

Medium Run

30.

The minimum efficient scale is ...

a)

The largest output quantity at which the long-run cost reaches its highest level

b)

The smallest quantity of output at which the long-run average cost reaches its lowest level

c)

Technology that leads to constant long-run average cost output that increases

31.

Perfect competition is an industry with...

a)

a few firms producing identical goods

b)

many firms producing goods that differ somewhat

c)

many firms producing identical goods

32.

The image above shows a firm making

a)

Economic Profit

b)

Economic loss

c)

Breaking even

d)

Shutting down

33.

What is the profit maximizing condition?

a)

MR = D

b)

MR = MC

c)

MC = D

d)

D = Profits

34.

What is the goal of a firm?

a)

to make profits

b)

to maximize profits

c)

to maximize revenue

d)

none of the above

35.

Total Revenue (minus) Explicit and Implicit cost =

a)

Accounting Profit

b)

Economic Profit

c)

Economic Cost

d)

Total Profit

36.

A firm in the long run will make

a)

Losses

b)

Economic Profit

c)

Profits greater than MC

d)

none of the above

37.

MC crosses the ATC and AVC

a)

where you draw it

b)

at its lowest point

c)

where MR=MC

d)

None of the above

38.

If Q is increasing but so is ATC then it must be

a)

Economies of Scale

b)

Constant returns to scale

c)

Diseconomies to scale

d)

bad

39.

Should the following firm shutdown?

a)

Yes

b)

No

c)

Not enough information present

40.

Based on this graph, this firm will:

a)

make positive short-run profits

b)

incur losses in the short-run

c)

shut-down in the short run

41.

Firms are incurring short-run losses in a perfectly competitive firm. What will happen in the long-run?

a)

New firms will enter and price will increase

b)

New firms will enter and price will decrease

c)

Firms will exit and price will increase

d)

Firms will exit and price will decrease

42.

If P < ATC, a firm should

a)

shut down in the short run

b)

stay open in the short run

c)

stay open in the short run if P > AVC

d)

shut down in the short run if P > AVC

43.

Short-run losses encourage firms to...

a)

enter the industry

b)

leave the industry

c)

stay in the industry

44.

In monopolistic competition, the demand curve for a firm is....

a)

relatively elastic

b)

relatively inelastic

c)

unit elastic

45.

In monopolistic competition producers....

a)

have a full ability to set prices

b)

have some ability to set prices

c)

have no ability to set prices

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