1) If a firm is not operating at the output necessary to achieve all scale economies, it has not achieved its ? a. Efficient scale b. Average efficient scale c. Maximum efficient scale d. Minimum efficient scale
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2) Decrease returns to scale means that _____ as ______? a. Short run marginal cost rises, output rises b. long run marginal cost rises, output rises c. Short run average cost rises, output rises d. long run average cost rises, output rises
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3) A production is technique is technically efficient if ? a. output is maximized b. inputs are minimized c. there is no way to make a given output using less of one input and no more of the other inputs d. Costs are minimized
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4) In marketing “USP” stands for ? a. Unique Selling Proposition b. Underlying Sales Proposition c. Unit Sales Point d. Under Sales Procedure
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5) In Porter’s five force model conditions are more favorable for firms within an industry if ? a. Buyer power is high b. Supplier power is high c. Entry threat is low d. Substitute threat is high
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6) Effective branding will tend to make ? a. Demand more price inelastic b. Supply more price inelastic c. Demand more income elastic d. Supply more income elastic
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7) In monopolistic competition firms profit maximize where ? a. Marginal revenue = Average revenue b. Marginal revenue = Marginal cost c. Marginal revenue = Average cost d. Marginal revenue = Total cost
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8) In monopolistic competition ? a. Firms face a perfectly elastic demand curve b. All products are homogeneous c. Firms make normal profits in the long run d. There are barriers to entry to prevent entry
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9) If the long-run market supply curve for a good is perfectly elastic, an increase in the demand for that good will, in the long run, cause ? a. an increase in the number of firms in the market but no increase in the price of the good b. an increase the price of the good and an increase in the number of firms in the market c. an increase the price of the good but no increase in the number of firms in the market d. no impact on either the price of the good or the number of firms in the market
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10) If all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily available, then the long-run market supply curve for that good should be ? a. downward sloping b. perfectly inelastic c. upward sloping d. perfectly elastic
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