Economics (2) Chapter 9.1-9.

2 Name: ___________________

Part I. Fill the blank

1. A market structure is defined by number of sellers, type of product and ___________
2. Three barriers that prevent new firms from entering a market:
(a) Ownership of a vital resource
(b) Legal barriers
(c) ____________
3. Price maker: A firm that faces a ____________ demand curve and therefore can
choose among price and output combinations along the demand curve
4. Economies of scale: The average _____ decreases when an organization is large or
increases production.

Part II. Multiple Choice Questions

TC

TR
Total Revenu e and total cost

80



60

40

20

0 10 20 30 40
Quantity

1. The figure above shows a monopoly's total revenue and total cost curves. The
monopoly's economic profit is positive if it produces between
A) 0 and 40 units. B) 10 and 40 units.
C) 0 and 30 units. D) 0 and 10 units.
2. The figure above shows a monopoly's total revenue and total cost curves. The
monopoly's economic profit is zero if it produces
A) 30 units of output. B) 10 or 40 units of output.
C) 0 units of output. D) none of the above
3. The figure above shows a monopoly's total revenue and total cost curves. The
monopoly's economic profit is maximized when it produces
A) 10 units of output. C) 0 units of output.
B) 40 units of output. D) 30 units of output.
4. The figure above shows a monopoly's total revenue and total cost curves. The
monopoly's marginal revenue equals its marginal cost when it produces
A) 10 units of output. B) 30 units of output.
C) 40 units of output. D) 0 units of output.
5. The monopoly with the TR and TC curves shown in the figure above will produce
 A) 10 units of output. B) 40 units of output.
C) 30 units of output. D) 0 units of output.

ATC

MC
10


8
Price and Cos t

AVC


6


4


2


MR D

0 2 4 6 8 10 12

Quantity

6. The unregulated, single-price monopolist illustrated in the figure above has a total
revenue of
A) $8.00 per day. B) $36.00 per day.
C) $16.00 per day. D) $40.00 per day.
7. The unregulated, single-price monopolist illustrated in the figure above has a total
cost of
A) $16.00 per day. B) $40.00 per day.
C) $32.00 per day. D) $8.00 per day.
8. The unregulated, single-price monopolist illustrated of in the figure above earns an
economic profit
A) $8.00 per day. B) zero.
C) 10.00 per day. D) $40.00 per day.
9. The unregulated, single-price monopolist illustrated in the figure above will produce
A) 6 units per day. B) 9 units per day.
C) 0 units per day. D) 4 units per day.