Economics MCQs

A. In monopolistic competition entry into the industry is blocked
B. In monopolistic competition there are relatively few barriers to entry.
C. In monopolistic competition, firms can differentiate their products
D. In perfect competition firms can differentiate their products

A. Marginal costs
B. Fixed costs
C. Variable costs
D. Advertising costs

A. A period where the law of diminishing returns does not hold.
B. At least one fixed factor of production and firms neither leaving nor entering the industry
C. All inputs being variable
D. No variable inputs – that is all of the factors of production are fixed

A. All firms must make economic profits.
B. There are no fixed factors of production
C. A firm can vary all inputs, but it cannot change the mix of inputs it uses.
D. A firm can shut down, but it cannot exit the industry

A. Normal profit is zero
B. Total costs exceed total revenue
C. Total costs exceed normal profit
D. The firm is earning are economic profit

A. Approximately one-half
B. Smaller than
C. Larger than
D. Approximately equal to

A. The mr and mc curves
B. The ac and ar curves
C. The ac and mc curves
D. The mr and ar curves

A. How much to spend on advertising?
B. How much of each input to use?
C. What price to charge
D. None of these

A. More; more
B. Fewer; less
C. More; less
D. No; infinite

A. Produces less output, charges higher prices and earns economic profits.
B. Produces less output, charges lower prices and earns only a normal profit
C. Produces more output, charges higher prices and earns economics profits
D. Produces less output, charges lower prices and earns economic profits