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Exam (elaborations)

ECON 201 Exam 2 With Complete Solution

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  • ECON 201
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  • ECON 201

ECON 201 Exam 2 With Complete Solution...

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  • September 30, 2024
  • 27
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ECON 201
  • ECON 201
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Easton
ECON 201 Exam 2 With Complete Solution


In economics, a firm that faces no competitors is known as _______________.

A. an oligopoly

B. a monopoly

C. a perfect competitor

D. an oligopolizor - Answer B. a monopoly



________________________ arises where many firms are competing in a market to sell

similar but differentiated products.

A. Oligopolistic competition

B. Perfect competition

C. Monopolistic competition

D. Monogopolised competition - Answer C. Monopolistic competition



A firm's ___________ consist of expenditures that must be made before production starts
that

are typically, in the short run, _______________ regardless of the level of production.

A. fixed costs; do not change,

B. variable costs; are constantly changing,

C. fixed costs; are consistently changing,

D. variable costs; do not change, - Answer A. fixed costs; do not change,



______________ include all of the costs of production that rise with the quantity

produced.

A. Fixed costs

,B. Variable costs

C. Average costs

D. Average variable costs - Answer B. Variable costs



___________________________ occur when the marginal gain in output diminishes as each

additional unit of input is added.

A. Diminishing variable returns

B. Diminishing average returns

C. Diminishing marginal returns

D. Diminishing marginal costs - Answer C. Diminishing marginal returns



In order to find ____________, the firm's total costs need to be divided by the quantity of

its output.

A. diminishing marginal returns

B. fixed costs

C. variable cost

D. average cost - Answer D. average cost



To find the firm's average variable cost, its variable costs are divided by

____________________.

A. its' fixed costs

B. the quantity of output

C. its' average costs

D. diminishing marginal costs - Answer B. the quantity of output



The term _____________ is used to describe the added cost of producing one more unit.

A. average cost

, B. fixed cost

C. variable cost

D. marginal cost - Answer D. marginal cost



The term __________________ refers to a situation where the quantity of output increases,
but

the average cost of production decreases.

A. diminishing marginal returns

B. marginal cost output

C. economies of scale

D. diseconomies of scale - Answer C. economies of scale



The term "constant returns to scale" refers to a situation where

A. increasing all inputs leaves the average cost of production unchanged.

B. a larger-scale firm is able to produce at a lower cost than a smaller-scale firm.

C. increasing all inputs alters the average cost of production.

D. the quantity of output increases and the average cost of production decreases. -
Answer A. increasing all inputs does not alter the average cost of production.



If a firm is facing _____________________, then as the quantity of output increases, the

average cost of production increases.

A. decreasing returns to scale

B. consent returns to scale

C. economies of scale

D. increasing returns to scale - Answer A. decreasing returns to scale



_____________ is calculated by taking the quantity of everything that is sold and

multiplying it by the sale price.

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