Which of the following does NOT help explain why oligopolies exist?
A. product homogeneity
B. mergers
C. barriers to entry
D. economies of scale
Answer: A
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Which of the following is true of firms in both monopolistic competition and perfect competition?
a. Firms face a horizontal demand curve. b. Price exceeds marginal revenue. c. Firms can enter and leave the industry with relative ease. d. Price exceeds marginal cost. e. Products are differentiated.
The Latin expression ceteris paribus means
a. everything else being equal b. economic model c. partially correct d. certainty e. certain particulars
The method used by the ECB to measure inflation for meeting its objectives:
A. can result in a contractionary monetary policy being used in a country where inflation is already very low. B. is based on wholesale rather than retail prices. C. gives equal weight to each member country. D. gives greater relative weight to smaller countries.
What is the effect of profits in a monopoly?
a. Society is faced with a deadweight loss equal to the profit. b. Consumer losses are offset by producer gains. c. Producer losses are offset by consumer gains. d. Society gains at the monopolist’s expense.