Evidence from empirical studies of long-run cost-output relationships lends support to the:a. existence of a non-linear cubic total cost functionb. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firmc.
Question 10 out of 4 points Evidence from empirical studies of long-run
cost-output relationships lends support to the:a. existence of a
non-linear cubic total cost functionb. hypothesis that marginal costs
first decrease, then gradually increase over the normal operating range
of the firmc. hypothesis that total costs increase quadratically over
the ranges of output examinedd. hypothesis that total costs increase
linearly over some considerable range of output examinede. none of the
aboveQuestion 20 out of 4 pointsThe short-run cost function is:a. where
all inputs to the production process are variableb. relevant to
decisions in which one or more inputs to the production process are
fixedc. not relevant to optimal pricing and production output
decisionsd. crucial in making optimal investment decisions in new
production facilitiese. none of the aboveQuestion 30 out of 4
pointsWhich of the following is not an assumption of the linear
breakeven model:a. constant selling price per unitb. decreasing variable
cost per unitc. fixed costs are independent of the output leveld. a
single product (or a constant mix of products) is being produced and
solde. all costs can be classified as fixed or variableQuestion 44 out
of 4 pointsA ____ total cost function implies that marginal costs ____
as output is increased.a. linear; increase linearlyb. quadratic;
increase linearlyc. cubic; increase linearlyd. a and be. none of the
aboveQuestion 54 out of 4 pointsBreak-even analysis usually assumes all
of the following except:a. in the short run, there is no distinction
between variable and fixed costs. b. revenue and cost curves are
straight-lines throughout the analysis.c. there appears to be perfect
competition since the price is considered to remain the same re-gardless
of quantity.d. the straight-line cost curve implies that marginal cost
is constant.e. both c and dQuestion 64 out of 4 pointsIn the linear
breakeven model, the breakeven sales volume (in dollars) can be found by
multiplying the breakeven sales volume (in units) by:a. one minus the
variable cost ratiob. contribution margin per unitc. selling price per
unitd. standard deviation of unit salese. none of the aboveQuestion 74
out of 4 pointsThe main difference between perfect competition and
monopolistic competition is:a. the number of sellers in the market.b.
the ease of exit from the market.c. the difference in the firm's profits
in the long run.d. the degree of product differentiation.e. Whether it
is the short run or the long runQuestion 84 out of 4 pointsExperience
goods are products or servicesa. that the customer already knowsb. whose
performance is highly unusualc. whose quality is undetectable when
purchasedd. not likely to cause repeat purchasese. all of the
aboveQuestion 94 out of 4 pointsUncertainty includes all of the
following except ____.a. unknown effects of deliberate actionsb.
incomplete information as to the type of competitorc. random
disturbancesd. unverifiable claimse. accidents due to weather
hazardsQuestion 104 out of 4 pointsUnder asymmetric information,a. you
never get what you pay forb. you sometimes get cheatedc. you always get
cheatedd. at best you get what you pay fore. sellers make profits in
excess of competitive returnsQuestion 114 out of 4 pointsA "search good"
is:a. One that depends on how the product behaves over timeb. A product
whose quality is only found out over time by finding how durable it
isc. Like a peach that can be examined for flawsd. Like a used car,
since it is easy to determine its inherent qualitye. None of the
aboveQuestion 124 out of 4 pointsIf price exceeds average costs under
pure competition, ____ firms will enter the industry, supply will ____,
and price will be driven ____.a. more; decrease; downb. more; decrease;
upc. more; increase; downd. more; increase; upe. none of the
aboveQuestion 134 out of 4 pointsThe price for used cars is well below
the price of new cars of the same general quality. This is an example
of:a. The Degree of Operating Leverageb. A Lemon's Marketc. Redeployment
Assetsd. Cyclical Competitione. The Unemployment RateQuestion 144 out
of 4 pointsThe demand curve facing the firm in ____ is the same as the
industry demand curve.a. pure competition b. monopolistic competition c.
oligopoly d. pure monopoly e. none of the aboveQuestion 154 out of 4
pointsDeclining cost industriesa. have upward rising AC curves. b. have
upward rising demand curves. c. have -shaped total costs. d. have
diseconomies of scale. e. have marginal cost curves below their average
cost curveQuestion 164 out of 4 pointsIn natural monopoly, AC
continuously declines due to economies in distribution or in production,
which tends to found in industries which face increasing returns to
scale. If price were set equal to marginal cost, then:a. price would
equal average cost.b. price would exceed average cost.c. price would be
below average cost.d. price would be at the profit maximizing level for
natural monopolye. all of the aboveQuestion 174 out of 4 pointsThe
practice by telephone companies of charging lower long-distance rates at
night than during the day is an example of:a. inverted block pricingb.
second-degree price discriminationc. peak-load pricingd. first-degree
price discriminatione. none of the aboveQuestion 184 out of 4 pointsIn
the electric power industry, residential customers have relatively ____
demand for electricity compared with large industrial users. But
contrary to price discrimination, large industrial users generally are
charged ____ rates.a. similar, similar b. elastic, lower c. elastic,
higher d. inelastic, lowere. inelastic, higherQuestion 194 out of 4
points____ as practiced by public utilities is designed to encourage
greater usage and therefore spread the fixed costs of the utility's
plant over a larger number of units of output.a. Peak load pricingb.
Inverted block pricingc. Block pricingd. First degree price
discriminatione. None of the aboveQuestion 204 out of 4 points“Conscious
parallelism of action” among oligopolistic firms is an example of
____.a. intense rivalryb. a formal collusive agreementc. informal, or
tacit, cooperationd. a cartele. none of the aboveQuestion 214 out of 4
pointsBarometric price leadership exists whena. one firm in the industry
initiates a price change and the others follow it as a signal of
changes in cost or demand in the industry.b. one firm imposes its best
price on the rest of the industry.c. all firms agree to change prices
simultaneously.d. one company forms a price umbrella for all others.e.
the firms are all colludingQuestion 224 out of 4 pointsIf a cartel seeks
to maximize profits, the market share (or quota) for each firm should
be set at a level such that the ____ of all firms is identical.a.
average total costb. average profitc. marginal profitd. marginal coste.
marginal revenueQuestion 234 out of 4 pointsA(n) ____ is characterized
by a relatively small number of firms producing a product.a. monopolyb.
syndicatec. cooperatived. oligopolye. none of the aboveQuestion 244 out
of 4 pointsIn a kinked demand market, whenever one firm decides to lower
its price,a. other firms will automatically follow.b. none of the other
firms will follow.c. one half of the firms follow and one half of the
firms don't follow the price cut.d. other firms all decide to exit the
industrye. all of the other firms raise their prices.Question 254 out of
4 pointsIn the Cournot duopoly model, each of the two firms, in
determining its profit-maximizing price-output level, assumes that the
other firm's ____ will not change.a. priceb. outputc. marketing
strategyd. inventorye. none of the above
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