ECON 312 Midterm Exam 2

ECON 312 Midterm Exam 2

1. (TCO 3) Which market model assumes the least number of firms in an industry?

2. (TCO 3) Local electric or gas utility companies mostly operate in which market model?

3. (TCO 3) The fast-food restaurants would be an example of which market model?

4. (TCO 3) Sam owns a firm that produces tomatoes in a purely competitive market. The firm’s demand curve is

5. (TCO 3) T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2 each. At this level of output, the average total cost is $2.50 and the average variable cost is $2.20. Based on these data, the firm should

6. (TCO 3) A firm should always continue to operate at a loss in the short run if

7. (TCO 3) The short-run supply curve for a competitive firm is the

8. (TCO 3) One feature of pure monopoly is that the monopolist is

9. (TCO 3) Barriers to entry

10. (TCO 3) The demand curve confronting a non discriminating, pure monopolist is

11. (TCO 3) Which is the best example of price discrimination?

12. (TCO 3) Monopolistic competition is characterized by firms

13. (TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will

14. (TCO 3) A unique feature of an oligopolistic industry is

15. (TCO 3) You are told that the four-firm concentration ratio in an industry is 20. Based on this information you can conclude that

16. (TCO 3) A major reason that firms form a cartel is to

17. (TCO 1) Money is not an economic resource because

18. (TCO 1) Refer to the diagram which is based on the Circular Flow Model in Chapter 2. Arrows (3) and (4) represent

19. (TCO 2) Refer to the diagram. A decrease in demand is depicted by a

20. (TCO 2) Refer to the information and assume the stadium capacity is 5,000. If the Mudhens’ management charges $7 per ticket

21. (TCO 2) Which type of goods is most adversely affected by recessions?

22. (TCO 3) The following cost data are for a firm in the short run:…..What is the …..?

23. (TCO 1) Refer to the diagram. Points A, B, C, D, and E show

24. (TCO 3) Any activity designed to transfer income or wealth to a particular individual or firm at society’s expense is called

25. (TCO 3) a.) Do you agree or disagree with the statement that: “A monopolist always charges the highest possible price.”? Explain. b.) Why can’t an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market?

26. (TCO 2) What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant.