ECN 104 Microeconomics Final Test
Questions and Correct Answers
100% Guaranteed Pass
Perfect Competition Characteristics - Answer- - very large # of sellers
- standardized product
- "price takers"
- perfectly elastic demand
- demand graphs as horizontal line
Monopoly Characteristics - Answer- - single seller
- no close substitutes
- price maker
- blocked entry
- non-price competition
Monopolistic Competition Characteristics - Answer- many sellers, product differentiation,
free entry and exit
Oligopoly Characteristics - Answer- 1. few, mutually interdependent firms
2. high barriers to entry
3. limited control over price
4. homogeneous or differentiated product
productive efficiency - Answer- the production of a good in the least costly way
allocative efficiency - Answer- distribution of resources among firms/industries to
produce the goods most wanted by society
Consumer Surplus - Answer- the difference between the highest price a consumer is
willing to pay for a product and market price of product
Producer Surplus - Answer- difference b/w the minimum prices producers are willing to
accept for a product and market price of product
Creative Destruction - Answer- the creation of new products and methods completely
destroys the old products and methods
Deadweight Loss - Answer- A net loss of total (consumer and producer) surplus.
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