,1. Multiple Choice: Which of the following is not a key feature of
monopolistic competition?
a) Many sellers
b) Product differentiation
c) Free entry and exit in the market
d) Price-taking behavior
Answer: d) Price-taking behavior
Rationale: In monopolistic competition, firms have some power
to set prices due to product differentiation, unlike in perfect
competition where firms are price-takers.
2. True/False: In a perfectly competitive market, individual firms
can influence the market price.
Answer: False
Rationale: In perfect competition, the market determines the
price, and individual firms must accept this price as given.
3. Fill-in-the-Blank: The _________ is the additional cost incurred
from producing one more unit of a good.
Answer: Marginal Cost
, Rationale: Marginal cost is a key concept in economics that
measures the cost of producing an additional unit of output.
4. Multiple Response: Select all that apply. Which of the following
are assumptions of the Classical model of economics?
a) Flexible prices and wages
b) Full employment
c) Fixed money supply
d) Government intervention is necessary
Answers: a) Flexible prices and wages, b) Full employment, c)
Fixed money supply
Rationale: The Classical model assumes that the economy is self-
regulating and that markets clear through flexible prices and wages,
with full employment and a fixed money supply. It does not
advocate for government intervention.
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ClemAcademia. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.