Month: May 2023

A good gives rise to external benefits and is produced under conditions of imperfect competition.

Which statement must be true?

Select ONE answer:

1. Consumers of the good are paying too low a price.
2. Firms producing the good will make a loss.
3. Output of the good is below the socially optimum level.
4. Social costs of production exceed private costs.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

What might prevent an economy in which all firms are required to equate price and marginal cost from achieving allocative efficiency?

Select ONE answer:

1. differences in preferences between consumers
2. divergences between private and social costs
3. inequalities of income and wealth
4. product differentiation

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A discriminating monopolist, faced with two demand curves of differing elasticity, will equate the combined marginal cost of production with…..?

Select ONE answer:

1. marginal revenue in each market.
2. average revenue in each market.
3. the difference between the marginal revenues in the two markets.
4. the difference between the average revenues in the two markets.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

In which way does monopolistic competition differ from perfect competition?

Select ONE answer:

1. Average revenue exceeds average cost in long-run equilibrium.
2. Barriers exist to the entry of new firms.
3. Marginal revenue exceeds marginal cost in long-run equilibrium.
4. Products are differentiated.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

To maximise total revenue, up to which point should a monopolist increase output?

Select ONE answer:

1. where marginal revenue equals average revenue
2. where marginal revenue is maximised
3. where marginal revenue is zero
4. where price elasticity of demand is zero

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.