1. Which of the following is not a condition of long run competitive equilibrium?

a. There is no incentive for firms to enter the industryb. There is no incentive for firms to exit the industryc. There is no incentive for firms to produce more or less output.d. There is no incentive for firms to change plant size.

2. Negative externalities that arise from the production of a good;a. cause an increase in the demand for the goodb. cause a decrease in the demand for the goodc. impose costs on third partiesd. bring private costs into equality with social costs.

3. A consequence of a negative externality is that social costs ______ private costs, and the socially optimal level of output ________.

a. equal; is not equal to the social costs or private costs.b. do not equal; is obtainedc. do not equal; is not obtainedd. equal; is obtainede. equal; is not obtained

4. Generally, negative externalities result in;a. too much of a good being producedb. the socially optimal output of a good being producedc. too little of a good being producedd. either A or C

5. Marginal Revenue is equal to ______ divided by _______.

a. total revenue; quantity of outputb. marginal cost; wagesc. change in total revenue; quantity of output.d. change in total revenue; change in quantity of output

6. The monopolist's marginal revenue curve is:a. downward sloping and lies below the firm's demand curveb. upward sloping and lies above the firms demand curvec. perfectly inelasticd. the same as the industry demand curve

7. Which of the following is true?

a. Economists calculate only economic profit, and accountants calculate only accounting profitb. economic profits is always greater that accounting profitc. accounting profit is the difference between total revenue and explicit costsd. economic profit is the difference between total revenue and implicit costs