ECON 312 Midterm Exam 3
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ECON 312 Midterm Exam 3
1. (TCO 3) Mutual interdependence would tend to limit control over price in which market model?
2. (TCO 3) Under which market model are the conditions of entry into the market easiest?
3. (TCO 3) The production of agricultural products such as wheat or corn would best be described by which market model?
4. (TCO 3) The demand curve faced by a purely competitive firm
5. (TCO 3) A profit-maximizing firm in the short run will expand output
6. (TCO 3) A firm should increase the quantity of output as long as its
8. (TCO 3) The classic example of a private, unregulated monopoly is
9. (TCO 3) Barriers to entry
10. (TCO 3) The demand curve confronting a non-discrimination, pure monopolist is
11. (TCO 3) Which is the best example of price discrimination?
12. (TCO 3) In which industry is monopolistic competition most likely to be found?
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) A low concentration ratio means that
16. (TCO 3) In which set of market models are there the most significant barriers to entry?
17. (TCO 1) The four factors of production are
18. (TCO 1) Refer to the diagram below which is based on the Circular Flow Model in Chapter 2. Arrows (1) and (2) represent
19. (TCO 2) Refer to the diagram. An increase in quantity demanded is depicted by a
20. (TCO 2) Refer to the information and assume the stadium capacity is 5,000. The supply of seats for the game
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:
23. (TCO 1) Refer to the diagram. Points A, B, C, D, and E show
24. (TCO 3) Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as
25. (TCO 3) a.) A pure monopolist determines that at the current level of output the marginal cost of production is $2, average variable costs are $2.75, and average total costs are $2.95. The marginal revenue is $2.75. What would you recommend that the monopolist do to maximize profits? b.) Why might a business owner keep their business open but let it deteriorate, rather than shut it down? Will this profitability last?
26. (TCO 2) Evaluate how the following situations will affect the demand curve for iPods.(a) Income statistics show that income of 18–25-year-olds have increased by 10 percent over the last year. (b) Efforts of music artists wanting greater protection of their music result in more stringent enforcement of copyrights and the shutdown of numerous illegal downloading sites.(c) Believing that it has significant control of the market for portable digital music players, Apple decides to raise the price of iPods with the goal of increasing profits. (d) The price of milk decreases.