Part IV: AP Macroeconomics & Microeconomics Tests
- Question 46 refers to the following graph.
A monopolistic firm has the cost curves depicted above and operates in a monopolistic market. Which of the
following statements would be true if the market becomes perfectly competitive?
A. The firm will charge price P^1.
B. The firm will charge price P^2.
C. The firm will charge price P^3.
D. The firm would produce quantity Q^1.
E. The firm will produce quantity Q^3.Q^3 Q^2 Q^1 QuantityDATCMCMRP^3P^1
P^2Price- Assume that the imported French wine market is
perfectly competitive. If the government puts a
tariff on imported French wines, what will be the
effect on the imported wine market?
A. The price of imported French wine will
decrease.
B. The price of imported French wine will stay
the same.
C. The quantity of French wine produced will
increase.
D. The quantity of French wine imported will
stay the same.
E. The quantity of French wine imported will
decrease. - If the price of apples decreases and as a result the
quantity demanded of oranges increases, what can
be said about apples and oranges?
A. The demand for oranges is elastic.
B. The demand for apples is elastic.
C. The elasticity of demand for apples is
unitary.
D. Apples and oranges are complements.
E. Apples and oranges are substitutes.