Economic profit involves explicit costs

Question

Questions:

Question 1
A firm may become a monopoly if it controls the entire supply of a basicinput required to manufacture a product, has exclusive rights to make a product or use a particular process, and/or is awarded a market franchiseby a government agency.
True
False

Question 2
A firm's economic profit is usually higher than its accounting profit.
True
False

Question 3
To affect sales, a monopolistic competitor can lower price or differentiatethe product.
True
False

Question 4
A firm in a perfectly competitive industry may incur a short-term loss and yet continue producing in order to minimize losses.
True
False

Question 5
Average fixed costs diminish continuously as output increases.
True
False

Question 6
In general, the product price is higher in an oligopolistic market than thatof monopolistic competition.
True
False

Question 7
The monopolist produces a product for which there are no close substitutegoods.
True
False

Question 8
Economies of scale is when the cost of producing a unit increases as itsoutput rate increases.
True
False

Question 9
Economic profit involves total revenue minus the total costs, with total costmeasured as the opportunity costs of production.
True
False

Question 10
Marginal costs will start to fall before average costs start to fall.
True
False

Question 11
The short run is a period of time when all factor inputs are fixed.
True
False

Question 12
Since there is free mobility of resources, the perfect competitor can freelymove in and our of a given perfectly competitive market.
True
False

Question 13
Unlike the perfect competitor, who is a price taker, the monopolist is facedwith a demand curve such that he/she can charge whatever price he/shewishes.
True
False

Question 14
The long-run average cost curve will be derived by adding up all the shortrun average total cost curves.
True
False

Question 15
The four types of market structures we study in economics are perfectcompetition, monopolies, oligopolies, and corporations.
True
False

Question 16
The demand which a monopolist is faced with is also the market demandfor the product.
True
False

Question 17
A perfect competitor can reap an economic profit in the short run but notin the long run.
True
False

Question 18
One of the objectives of the monopolist is to squeeze out smaller competitors from the market.
True
False

Question 19
The average total cost curve on a graph will be found below the averagevariable cost curve.
True
False

Question 20
A monopolist is different from a perfect competitor by the monopolist'sprice being equal to average revenue.
True
False

Question 21
A perfectly competitive industry is characterized by a few producers, all producers produce a homogeneous product, and there is free mobilityof resources.
True
False

Question 22
Total fixed cost curve shows that fixed costs vis-à-vis production levelsdon't change.
True
False

Question 23
At least in theory, the more competition there is in the market, the greateralso is the efficiency in the economy.
True
False

Question 24
A monopolistic competitor produces a differentiated product having numerous close substitutes.
True
False

Question 25
Economic profit involves explicit costs, while accounting profits involveimplicit costs.
True
False