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Devry ECON 312 Week 3 Quiz complete use as a guide only

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Week 3 Quiz

 1.

Question :

(TCO 3) Which of the following is most likely to be an implicit cost for Company X?

 

Student Answer:

Forgone rent from the building owned and used by Company X

 

Rental payments on IBM equipment

 

Payments for raw materials purchased from Company Y

 

Transportation costs paid to a nearby trucking firm

 

Instructor Explanation:

Chapter 7.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 2.

Question :

(TCO 3) To economists, the main difference between the short run and the long run is that

 

Student Answer:

the law of diminishing returns applies in the long run, but not in the short run.

 

in the long run all resources are variable, while in the short run at least one resource is fixed.

 

fixed costs are more important to decision making in the long run than they are in the short run.

 

in the short run all resources are fixed, while in the long run all resources are variable.

 

Instructor Explanation:

Chapter 7.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 3.

Question :

(TCO 3) Economists would describe the U.S. automobile industry as

 

Student Answer:

purely competitive.

 

an oligopoly.

 

monopolistically competitive.

 

a pure monopoly.

 

Instructor Explanation:

Chapter 8.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 4.

Question :

(TCO 3) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue

 

Student Answer:

may be either greater or less than $5.

 

will also be $5.

 

will be less than $5.

 

will be greater than $5.

 

Instructor Explanation:

Chapter 8

 

Points Received:

1 of 1

 

Comments:

 

 

Question 5.

Question :

(TCO 3) Which of the following best approximates a pure monopoly?

 

Student Answer:

The foreign exchange market

 

The Kansas City wheat market

 

The only bank in a small town

 

The soft drink market

 

Instructor Explanation:

Chapter 10.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 6.

Question :

(TCO 3) Confronted with the same unit cost data, a monopolistic producer will charge

 

Student Answer:

the same price and produce the same output as a competitive firm.

 

a higher price and produce a larger output than a competitive firm.

 

a higher price and produce a smaller output than a competitive firm.

 

a lower price and produce a smaller output than a competitive firm.

 

Instructor Explanation:

Chapter 10.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 7.

Question :

(TCO 3) Monopolistic competition means

 

Student Answer:

a market situation where competition is based entirely on product differentiation and advertising.

 

a large number of firms producing a standardized or homogeneous product.

 

many firms producing differentiated products.

 

a few firms producing a standardized or homogeneous product.

 

Instructor Explanation:

Chapter 11.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 8.

Question :

(TCO 3) The term oligopoly indicates

 

Student Answer:

a one-firm industry.

 

many producers of a differentiated product.

 

a few firms producing either a differentiated or a homogeneous product.

 

an industry whose four-firm concentration ratio is low.

 

Instructor Explanation:

Chapter 11.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 9.

Question :

(TCO 3) Which of the following is a unique feature of oligopoly?

 

Student Answer:

Mutual interdependence

 

Advertising expenditures

 

Product differentiation

 

Nonprice competition

 

Instructor Explanation:

Chapter 11.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 10.

Question :

(TCO 3) An industry having a four-firm concentration ratio of 85%

 

Student Answer:

approximates pure competition.

 

is monopolistically competitive.

 

is a pure monopoly.

 

is an oligopoly.

 

Instructor Explanation:

Chapter 11.

 

Points Received:

1 of 1

 

Comments:

 

 

Question 11.

Question :

(TCO 3) In economics, how would you define the SHORT RUN, and what is the LONG RUN? How can you distinguish between the two?

 

Student Answer:

 

The short run is the time period that is too brief for a firm to alter its plant capacity. The plant size is fixed in the short run. Short run costs, then, are the wages, raw materials, etc., used for production in a fixed plant. The long run is a period of time long enough for a firm to change the quantities of all resources employed, including the plant size. Long run costs are all costs, including the cost of varying the size of the production plant.

 

Instructor Explanation:

Chapter 7.

 

 

Points Received:

5 of 5

 

Comments:

 

 

Question 12.

Question :

(TCO 3) Identify the primary characteristics of perfect competition and monopoly. Give examples of each.

 

Student Answer:

 

Monopolistic competition is a form of competition in which there are many producers and consumers. The monopolistic part comes into play because each competitor in the industry attempts to differentiate their product in some way. Thus, they do not produce a standard, or homogeneous, product. They provide different products. Thus, the Gap and Old Navy are monopolistic competitors. Each produces a similar item, but they attempt to differentiate themselves. Through this differentiation, they maintain power to control the price of their product based upon the difference in their product. In addition to the above factors, there are few barriers to entry into the market. In perfect competition, the characteristics are largely the same. There are a large number of producers and consumers. Barriers to entry are very low. However, the product produced is homogenous, meaning each producer produces the same product. Farmers are generally a good example of this. Anything that is traded as a commodity would be included in the perfect competition model. In addition, these producers have no control over the price of their product at all, whereas the monopolistic competitor has a degree of control.

 

Instructor Explanation:

Chapter 11.

 

Points Received:

5 of 5

 

Comments:

 

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[Solved] Devry ECON 312 Week 3 Quiz complete use as a guide only

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Week 3 Quiz 1. Question : (TCO 3) Which of the following is most likely to be an implicit cost for Company X? Student Answer: Forgone rent from the building owned and used by Company X Rental payments on IBM equipment Payments f...
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Devry ECON 312 Week 3 Quiz complete use as a guide only

Week 3 Quiz 1. Question : (TCO 3) Which of the following is most likely to be an implicit cost for Company X? Student Answer: Forgone rent from the building owned and used by Company X Rental payments on IBM equ...
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Devry ECON 312 Week 3 Quiz | All correct Answers

1. (TCO 3) Which of the following is most likely to be an implicit cost for Company X? (Points : 1)
Forgone rent from the building owned and used by Company X
Rental payments on IBM equipment
Payments for ra...

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