The University of California at Irvine (UCI) allows student organizations and pr
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The University of California at Irvine (UCI) allows student organizations and private firms to sell items on campus to raise funds for various activities. Many of the organizations sell boba, a Taiwanese tea drink, because boba is popular with students. The market for boba on the UCI campus is very competitive. If legislation is passed to restrict the entry of private firms into the boba market at the UCI campus, the
Group of answer choicessupply for boba would increase.market would become more competitive.
demand for boba would increase.
market would become less competitive.
demand for boba would fall.
Flag question: Question 2Question 21 pts
Sunk costs:
Group of answer choicesare future costs that you have to incur.are costs that have been incurred as a result of past decisions.
cause the profit-maximizing rule to no longer be useful.
are included only in economic profits.
should be taken into consideration when making decisions about future production.
Flag question: Question 3Question 31 pts
The deciding factor for if a firm will shut down in the long-run is if the:
Group of answer choicesprice is above the minimum average total cost (ATC)price is anywhere below the minimum average total cost (ATC)
price is equal to the minimum average total cost (ATC)
price is anywhere above the minimum average variable cost (AVC)
Flag question: Question 4Question 41 pts
Which of the following is evidence of market power?
Group of answer choicesThe firm has perfect control over pricemarkup
Output is fixed despite cost changes
Optimal output is less than industry output
The demand curve for the firm is horizontal
Flag question: Question 5Question 51 pts
Which of the following industry structures is best associated with low barriers to entry?
Group of answer choicesmonopolistic competitionmonopoly
a cartel
a collusive industry
oligopoly
Flag question: Question 6Question 61 pts
Which of the following is true in long-run equilibrium for both a competitive market and monopolistic competition?
Group of answer choicesAccounting profit is zeroEconomic profit is zero.
Productive efficiency is achieved
Long-run average cost is minimized
Price equals marginal revenue
Flag question: Question 7Question 71 pts
Apple and Google apply for hundreds of patents every year. These patents:
Group of answer choicesprovide incentives for Apple and Google to spend large amounts of money up front on research and development of new products.create more competition among Apple, Google, and other tech firms than would occur without government intervention.
make it easy for Apple and Google products to be similar.
make it easy for other firms to compete with Apple and Google.
allow Apple and Google to produce goods with no risk of monetary loss.
Flag question: Question 8Question 81 pts
The profit-maximizing rule for a monopolist is:
Group of answer choicesaverage total cost = marginal revenue.price = marginal cost.
average total cost = marginal cost.
marginal revenue = marginal cost.
price = marginal revenue.
Flag question: Question 9Question 91 pts
Which of the following industries is most likely an oligopoly?
Group of answer choicescomputer repair industryhouse-painting industry
construction industry
wheat industry
cellphone industry
Flag question: Question 10Question 101 pts
Which industry is characterized by having only a few firms (sellers)?
Group of answer choicesmonopolyperfectly competitive
monopolistically competitive
oligopoly
Flag question: Question 11Question 111 pts
Which of the following is an example of collusion?
Group of answer choicesVerizon builds more cellphone towersAmerican Airlines and United Airlines agree to raise prices
Nike and Reebok compete on price
Dell and Gateway compete on quantity
Flag question: Question 12Question 121 pts
Player A and Player B are playing a game involving several rounds of a prisoner’s dilemma where their choices are to “cooperate” or “defect.” After each round ends, one player roles a six-sided die. If the die lands on 6, the game ends; however, if the die lands on any other number, the game continues and players play another round. Prior to the game starting, the players formulate a strategy that specifies what they will do in every possible round they might find themselves in. If Player A is playing the tit-for-tat strategy, in the:
Group of answer choicessecond round, Player A will definitely choose defectfirst round, Player A will definitely choose defect
second round, Player A will definitely choose cooperate
first round, Player A will definitely choose cooperate
Flag question: Question 13Question 131 pts
When a particular strategy produces a better outcome for a person regardless of the strategies others choose, we say it is a(n):
Group of answer choicesequilibrated strategysurplus maximization strategy
dominated strategy
dominant strategy
efficient strategy
Flag question: Question 14Question 141 pts
Which of the following situations does not represent derived demand?
Group of answer choicesthe demand for fast-food fryersthe demand for trainers
the demand for home ovens
the demand for office space
the demand for bakers
Flag question: Question 15Question 151 pts
The area underneath a firm’s labor demand curve and above the market wage is the graphical representation of the firm’s:
Group of answer choicesprofitsrevenues
costs
losses
Flag question: Question 16Question 161 pts
Which of the following statements about the real-income effect and the substitution effect is true?
Group of answer choicesThe real-income effect and the substitution effect cannot occur at the same time.The real-income effect does not always exist, but the substitution effect always exists.
The real-income effect and the substitution effect always exist.
The real-income effect and the substitution effect occur only with an increase in price.
The real-income effect always exists, but the substitution effect does not always exist.
Flag question: Question 17Question 174 pts
Please answer the following regarding market structures:
In the long-run, which market structures (if any) will always see zero economic profit? Are there any additional market structures which may see zero economic profits in the long-run as well?
How do we know when a firm is experiencing zero long-run economic profits? You may think of answering this in terms of describing a graph, or in terms of describing the market conditions we may see.
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