1. A monopolist is a:
a-price taker.
b-price setter.
c-cost maximizer.
d-quantity taker.
2. In perfectly competitive markets, if the price is _______ , the firm will _______ .
a-greater than ATC; make an economic profit
b-less than the minimum AVC; shut down
c-greater than the minimum AVC but less than ATC; continue to produce and incur a loss.
d-all of the above are true.
3. variable that responds to a change in another variable is called a(n) _______ variable.
a-independent
b-dependent
c-theoretical
d-all of the above are true
4. In dealing with utility, we assume that the ability of consumers to purchase goods and services is:
a-infinite.
b-irrelevant.
c-limited.
d-infinitesimal.
5. The scientific method is more difficult for economists than, say, chemists, because:
a-controlled laboratory conditions are more problematic in economics.
b-it is difficult to hold other factors that may affect the variables being studied constant in economics.
c-economic conditions may change quickly and unexpectedly.
d-all of the above.
6. A determinant of the demand for a factor of production is the:
a-price of the factor.
b-marginal cost of the factor.
c-productivity of the factor.
d-quantity of the factor supplied.