11) Price is constant or given to the individual firm selling in a purely competitive market becauseA. the firm's demand curve is downward slopingB. of product differentiation reinforced by extensive advertisingC. each seller supplies a negligible fraction of total supplyD. there are no good substitutes for its product12) The most important pricing strategy for a perfectly competitive firm isA. minimizing costB. maximizing salesC. product differentiationD. advertising13) Which of the following is a nonprice barrier of entry?A. Huge sunk costB. DiscountsC. Product differentiationD. Advertising14) A third-degree price discrimination can be applied to which of the following market structures?A. A monopolyB. An oligopolyC. A monopolistic competitionD. A perfect competition15) Investing in R&D is more likely to occur in markets whereA. firms have monopoly power protected by regulatory barriersB. markets are closely competitive markets with close to zero economic profitsC. markets are oligopoly markets with strong collusion agreementsD. markets are monopolistic competitive markets16) All economies of scale are achieved at the minimum ofA. average total costB. total costC. average variable costD. average fixed cost17) Inflation is undesirable because itA. arbitrarily redistributes real income and wealthB. invariably leads to hyperinflationC. usually is accompanied by declining real GDPD. reduces everyone’s standard of living in the same proportion18) An economy’s aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of theA. net export effectB. wealth effectC. real-balances effectD. multiplier effect19) Suppose productivity rises in a particular economy, but wages stay the same. Other things equal,A. the demand curve will shift leftwardB. the supply curve will shift rightwardC. the supply curve will shift leftwardD. expenditures curve will shift rightward20) If personal taxes were decreased and resource productivity increased simultaneously, the equilibriumA. output would riseB. output would fallC. price level would necessarily fallD. price level would necessarily rise
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