经济学原理对应练习17.doc

1、Chapter 17/Monopolistic Competitionv767Chapter 17Monopolistic CompetitionMultiple Choice1.Which of the following is not a characteristic of monopolistic competition?a.A large number of sellers.b.Firms are price takers.c.There is free entry into the market.d.Sellers offer products that are, in some w

2、ay, different from their competitors products.ANS: BPTS: 1DIF: 1REF: 17-0TOP: Monopolistic competitionMSC: Definitional2.Which of the following markets would most likely be represented by monopolistic competition?a.The market for corn.b.The market for cable television service.c.The market for #2 woo

3、den pencils.d.The market for clothing.ANS: DPTS: 1DIF: 2REF: 17-0TOP: Monopolistic competitionMSC: Interpretive3.Monopolistic competition is characterized by which of the following attributes?(i)Free entry(ii)Product differentiation(iii)Many sellersa.(i) and (iii) onlyb.(i) and (ii) onlyc.(ii) and (

4、iii) onlyd.(i), (ii), and (iii)ANS: DPTS: 1DIF: 1REF: 17-1TOP: Monopolistic competitionMSC: Definitional4.In a monopolistically competitive industry, firms set pricea.equal to marginal cost since each firm is a price taker.b.below marginal cost since each firm is a price taker.c.above marginal cost

5、since each firm is a price setter.d.always a fraction of marginal cost since each firm is a price setter.ANS: CPTS: 1DIF: 2REF: 17-1TOP: PriceMSC: Interpretive5.In which of the following market structures are there a large number of sellers?(i)Monopolistic competition(ii)Perfect competition(iii)Olig

6、opolya.(i) and (ii) onlyb.(ii) and (iii) onlyc.(ii) onlyd.(i), (ii), and (iii)ANS: APTS: 1DIF: 1REF: 17-1TOP: MarketsMSC: Definitional6.In which of the following market structures does free entry and exit play an important role in the long-run equilibrium outcome?(i)Perfect competition(ii)Monopolist

7、ic competition(iii)Monopolya.(i) onlyb.(i) and (ii) onlyc.(ii) and (iii) onlyd.(i), (ii), and (iii)ANS: BPTS: 1DIF: 2REF: 17-1TOP: MarketsMSC: Interpretive7.Monopolistic competition differs from perfect competition because in monopolistically competitive marketsa.there are barriers to entry.b.all fi

8、rms can eventually earn economic profits.c.each of the sellers offers a somewhat different product.d.strategic interactions between firms is vitally important.ANS: CPTS: 1DIF: 2REF: 17-1TOP: MarketsMSC: Interpretive8.One way in which monopolistic competition differs from oligopoly is thata.there are

9、 no barriers to entry in oligopolies.b.in oligopoly markets there are only a few sellers.c.all firms in an oligopoly eventually earn zero economic profits.d.strategic interactions between firms are rarely evident in oligopolies.ANS: BPTS: 1DIF: 2REF: 17-1TOP: MarketsMSC: Interpretive9.A similarity b

10、etween monopoly and monopolistic competition is that, in both market structures,a.strategic interactions among sellers are important.b.there are a small number of sellers.c.sellers are price makers rather than price takers.d.product differentiation is important.ANS: CPTS: 1DIF: 2REF: 17-1TOP: Market

11、sMSC: Interpretive10.A profit-maximizing firm in a monopolistically competitive market differs from a firm in a perfectly competitive market because the firm in the monopolistically competitive marketa.is characterized by market-share maximization.b.has no barriers to entry.c.faces a downward-slopin

12、g demand curve for its product.d.faces a horizontal demand curve at the market clearing price.ANS: CPTS: 1DIF: 2REF: 17-1TOP: MarketsMSC: Interpretive11.The profit-maximizing rule for a firm in a monopolistically competitive market is to always select the quantity at whicha.marginal revenue is equal

13、 to marginal cost.b.average total cost is equal to marginal revenue.c.average total cost is equal to price.d.average revenue exceeds average total cost.ANS: APTS: 1DIF: 2REF: 17-1TOP: Profit maximizationMSC: Interpretive12.A profit-maximizing firm in a monopolistically competitive market is characte

14、rized by which of the following?a.Average revenue exceeds marginal revenueb.Marginal revenue exceeds average revenuec.Average revenue is equal to marginal revenued.Revenue is always maximized along with profitANS: APTS: 1DIF: 2REF: 17-1TOP: PriceMSC: InterpretiveFigure 17-113.Refer to Figure 17-1. W

15、hich of the graphs depicts the situation for a profit-maximizing firm in a monopolistically competitive market?a.Panel ab.Panel bc.Panel cd.Panel dANS: APTS: 1DIF: 2REF: 17-1TOP: Monopolistic competitionMSC: Interpretive14.Refer to Figure 17-1. If a firm in a monopolistically competitive market was

16、producing the level of output depicted as Qd in panel (d), it woulda.not be maximizing its profit.b.be minimizing its losses.c.be losing market share to other firms in the market.d.be operating at excess capacity.ANS: APTS: 1DIF: 2REF: 17-1TOP: Profit maximizationMSC: Analytical15.Refer to Figure 17

17、-1. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,a.it could be operating in either a perfectly competitive market or in a monopolistically competitive market.b.it would not have excess capacity in its production as long as it is earning ze

18、ro economic profit.c.it is able to choose the price at which it sells its product.d.the firm can always raise its profit by increasing production since consumers will buy as much as the firm can produce.ANS: BPTS: 1DIF: 2REF: 17-1TOP: Profit maximizationMSC: Interpretive16.Product differentiation ca

19、uses the seller of a good to face what type of demand curve?a.Downward slopingb.Verticalc.Horizontald.Any of the above could be correct since product differentiation does not affect the shape of the demand curve.ANS: APTS: 1DIF: 2REF: 17-1TOP: Demand curveMSC: InterpretiveFigure 17-217.Refer to Figu

20、re 17-2. Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is earning a positive profit?a.Panel ab.Panel bc.Panel cd.Panel dANS: CPTS: 1DIF: 2REF: 17-1TOP: Monopolistic competitionMSC: Interpretive18.Refer to Figure 17-2. Which of the graphs show

21、n would be consistent with a firm in a monopolistically competitive market that is doing its best but still losing money?a.Panel ab.Panel bc.Panel cd.Panel dANS: BPTS: 1DIF: 2REF: 17-1TOP: Monopolistic competitionMSC: Interpretive19.Refer to Figure 17-2. Which of the graphs depicts a monopolisticall

22、y competitive firm in long-run equilibrium?a.Panel ab.Panel bc.Panel cd.None of the above is correct.ANS: DPTS: 1DIF: 2REF: 17-1TOP: Long-run equilibriumMSC: Interpretive20.In the short run, a firm in a monopolistically competitive market operates much like aa.firm in a perfectly competitive market.

23、b.firm in an oligopoly.c.monopolist.d.monopsonist.ANS: CPTS: 1DIF: 2REF: 17-1TOP: Monopolistic competitionMSC: Interpretive21.A monopolistically competitive firm choosesa.the quantity of output to produce, but the market determines price.b.the price, but competition in the market determines the quan

24、tity.c.price, but output is determined by a cartel production quota.d.the quantity of output to produce and the price at which it will sell its output.ANS: DPTS: 1DIF: 2REF: 17-1TOP: Monopolistic competitionMSC: Interpretive22.If firms in a monopolistically competitive market are earning positive pr

25、ofits, thena.firms will likely be subject to regulation.b.barriers to entry will be strengthened.c.some firms must exit the market.d.new firms will enter the market.ANS: DPTS: 1DIF: 2REF: 17-1TOP: Long-run equilibriumMSC: Interpretive23.If firms in a monopolistically competitive market are earning e

26、conomic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to the long-run equilibrium?a.An increase in demand for each firmb.A decrease in demand for each firmc.A downward shift in the marginal cost curve for each firmd.An upward

27、 shift in the marginal cost curve for each firmANS: BPTS: 1DIF: 2REF: 17-1TOP: Long-run equilibriumMSC: Interpretive24.If firms in a monopolistically competitive market are incurring economic losses, which of the following scenarios would best describe the change existing firms (who are able to stay

28、 in the market) would face as the market adjusts to the long-run equilibrium?a.A downward shift in the marginal cost curve for each firmb.An upward shift in the marginal cost curve for each firmc.A decrease in demand for each firmd.An increase in demand for each firmANS: DPTS: 1DIF: 2REF: 17-1TOP: L

29、ong-run equilibriumMSC: InterpretiveFigure 17-3The lines in the figures below illustrate the potential effect of entry and exit in a monopolistically competitive market on either the demand curve or the marginal cost curve of existing firms.25.Refer to Figure 17-3. Panel (d) illustrates the change t

30、hat would occur if existing firms faceda.long-run economic losses.b.a decrease in the diversity of products offered in the market.c.new entrants in the market.d.firms exiting the market.ANS: CPTS: 1DIF: 2REF: 17-1TOP: Long-run equilibriumMSC: Interpretive26.Refer to Figure 17-3. Which of the diagram

31、s illustrates the impact of some existing firms leaving the market?a.Panel ab.Panel bc.Panel cd.Panel dANS: CPTS: 1DIF: 2REF: 17-1TOP: Long-run equilibriumMSC: Interpretive27.In monopolistically competitive markets, positive economic profitsa.suggest that some existing firms will exit the market.b.suggest that new f