question
Monopoly is a market structure where:
A) there is a single seller producing s unique product
b) a few firms dominate the market
c)many firms produce differentiated products
c) many firms produce identical products
A) there is a single seller producing s unique product
b) a few firms dominate the market
c)many firms produce differentiated products
c) many firms produce identical products
answer
A
question
law of diminishing marginal productivity applies to short run because:
a) all inputs are variable in the short run
b)tech always changes
c) some inputs are fixed in the short
d) all inputs are fixed in the short run
a) all inputs are variable in the short run
b)tech always changes
c) some inputs are fixed in the short
d) all inputs are fixed in the short run
answer
C
question
The AVC curve decreases until it intersects the:
a)ATC curve
b) MC curve
c) AR curve
d)MR curve
a)ATC curve
b) MC curve
c) AR curve
d)MR curve
answer
b
question
the marginal cost is:
a) the additional revenue gained from producing an extra unit of output
b) total cost of production
c) avg cost of production
d) the additional cost of producing one additional unit of output
a) the additional revenue gained from producing an extra unit of output
b) total cost of production
c) avg cost of production
d) the additional cost of producing one additional unit of output
answer
d
question
in a perfectly competitive market:
a) the firm determines the price
b) the firm must sell at the price dictated by the market
c) the entrepreneur determines the price
d) the govt determines the price
a) the firm determines the price
b) the firm must sell at the price dictated by the market
c) the entrepreneur determines the price
d) the govt determines the price
answer
b
question
a monopoly firm selling lemonade to tourists on an island is currently maximizing profits by charging a price of 5$ per glass. it follows the the marginal cost of lemonade:
a) is equal to 5$
b)is less than 5$
c) is greater then 5$
d) is greater than the avg cost
a) is equal to 5$
b)is less than 5$
c) is greater then 5$
d) is greater than the avg cost
answer
b
question
a firm is producing an output level at which:
a) mr exceeds mc then the firm should reduce its output level to maximize profits
b) mr is less than mc then the firm should expand its output level to maximize profits
c) price exceeds atc then it is earning an economic profit
d) price is less than the minimum atc then the firm should shut down
a) mr exceeds mc then the firm should reduce its output level to maximize profits
b) mr is less than mc then the firm should expand its output level to maximize profits
c) price exceeds atc then it is earning an economic profit
d) price is less than the minimum atc then the firm should shut down
answer
c
question
in a perfectly competitive market;
a) firms sell a differentiated product where one firms output can be distinguished from another firms output
b) there are so many firms selling in the market than no one indi firm has the ability to control the market price
c) economic profits can be earned in the long run
d) very strong barriers to entry
a) firms sell a differentiated product where one firms output can be distinguished from another firms output
b) there are so many firms selling in the market than no one indi firm has the ability to control the market price
c) economic profits can be earned in the long run
d) very strong barriers to entry
answer
b
question
MP is zero:
a) where total product is the origin
b) where the total product curve is at its maximum
c) the point of inflection on the tp curve
d) never
a) where total product is the origin
b) where the total product curve is at its maximum
c) the point of inflection on the tp curve
d) never
answer
b
question
MP reaches a maximum:
a) where tp is at the origin
b) where tp is at its max
c) at the point of inflection on the tp curve
c) never
a) where tp is at the origin
b) where tp is at its max
c) at the point of inflection on the tp curve
c) never
answer
c
question
the more subs availableL:
a) the larger is the income elasticity of demand
b) the larger is the price elasticity of demand
c) the smaller is the income price elasticity of demand
d) the smaller is the price elasticity of demand
a) the larger is the income elasticity of demand
b) the larger is the price elasticity of demand
c) the smaller is the income price elasticity of demand
d) the smaller is the price elasticity of demand
answer
b
question
A significant long run diff between monopoly and monopolistic comp is:
a) free entry and exit in a monopolized mkt whereas barriers to entry exist in a comp mkt
b) comp firms control mkt supply: whereas a monopolists influence on mkt supply is imperceptible
c)profits are driven to zero in a perfectly comp mkt where as positive profits may persist in a monopolized mkt
d) vice versa " "
a) free entry and exit in a monopolized mkt whereas barriers to entry exist in a comp mkt
b) comp firms control mkt supply: whereas a monopolists influence on mkt supply is imperceptible
c)profits are driven to zero in a perfectly comp mkt where as positive profits may persist in a monopolized mkt
d) vice versa " "
answer
b
question
the profit maximizing monopolist will produce output where:
a) demand equal marginal cost
b) marginal revenue equals marginal cost
c) mc equals atc
d) mr equals zero
a) demand equal marginal cost
b) marginal revenue equals marginal cost
c) mc equals atc
d) mr equals zero
answer
b
question
the demand curve reps the erlationship between:
a) price and quantity supplied
b) elasticity and quantity supplied
c) price and quantity demanded
d) elasticity and quantity demanded
a) price and quantity supplied
b) elasticity and quantity supplied
c) price and quantity demanded
d) elasticity and quantity demanded
answer
c
question
the demand curve for the monopolist differs from the demand curve faced by a comp firm bc the demand curve for:
a) a monopolist lies below it mr curve
b) a monopolist is the mkt demand curve
c) a comp firm lies above its mr curve
d) a comp firm is inelastic
a) a monopolist lies below it mr curve
b) a monopolist is the mkt demand curve
c) a comp firm lies above its mr curve
d) a comp firm is inelastic
answer
b
question
the profit maximizing condition of a perfectly competitive firm is
a) MC=ATC
b) mr=avc
c)mc=mr
d) mc = avc
a) MC=ATC
b) mr=avc
c)mc=mr
d) mc = avc
answer
c
question
a perfectly competitive firm in the long run earns ______ normal profits but _______ economic profits
A) neg, 0
b) pos 0
c) pos, pos
d) )0,0
A) neg, 0
b) pos 0
c) pos, pos
d) )0,0
answer
b
question
AFC:
a) is constant over an entire range of output
b)decreases initially then increases when mc exceeds it
c) falls as output is increased in the short run
d) equals tc divided by quantity
a) is constant over an entire range of output
b)decreases initially then increases when mc exceeds it
c) falls as output is increased in the short run
d) equals tc divided by quantity
answer
c
question
to discuss janes utility one does not need to know
a) whether jane prefers a or b
b) how jane ranks her preferences
c) which combos of goods gives jane the same utility
d) the numerical values asso with janes utility
a) whether jane prefers a or b
b) how jane ranks her preferences
c) which combos of goods gives jane the same utility
d) the numerical values asso with janes utility
answer
d
question
the economic model of oligopoly assumes that firms use:
a) strategic decision making
b) monopolistoc decision making
c) economic decision making
d) comp decision making
a) strategic decision making
b) monopolistoc decision making
c) economic decision making
d) comp decision making
answer
a
question
avg rev for a monopolist is equal to
a) mr
b) the price the monopolist sets
c) atc
d) none
a) mr
b) the price the monopolist sets
c) atc
d) none
answer
d, demand
question
what happens to producer and consumer surplus when a monopolist increases output above the profit maximizing output level
a) producer surplus falls but consumer surplus rises
b) both prod and consumer surplus
c) both decrease
d) prod surplus rises but consumer sur falls
a) producer surplus falls but consumer surplus rises
b) both prod and consumer surplus
c) both decrease
d) prod surplus rises but consumer sur falls
answer
a
B!!!!??
B!!!!??
question
if a price ceiling is imposed on corn the likely result will be
a) a lower eq price for the corn as the supply shifts out
b) a higher eq price for corn as the demand curve shifts out
c) shortage of corn as the pc keeps the mkt from reaching eq
d) a surplus of corn as the pc keeps the mkt from reaching eq
a) a lower eq price for the corn as the supply shifts out
b) a higher eq price for corn as the demand curve shifts out
c) shortage of corn as the pc keeps the mkt from reaching eq
d) a surplus of corn as the pc keeps the mkt from reaching eq
answer
c
question
the mc curve:
a) first rises then declines
b) rises when the atc curve lies above the avc curve
c) crosses the tvs and tc curves at their max pt
d) begind to rise when the mp begins to fall
a) first rises then declines
b) rises when the atc curve lies above the avc curve
c) crosses the tvs and tc curves at their max pt
d) begind to rise when the mp begins to fall
answer
d
question
the mkt structure in which many diff firms supply similar but slightly differentiated products is
a) monopoly
b) monopolistic comp
c) oligpoly
d) perfect competition
a) monopoly
b) monopolistic comp
c) oligpoly
d) perfect competition
answer
b
question
if a monopolist produces less than the quantity where mc equals mr then
a) the additional revenue it gets is below the mc
b) the tr it gets is below the tc
c) the additional revenue it gets is above the additonal costs
d) the tr it gets is above the tc
a) the additional revenue it gets is below the mc
b) the tr it gets is below the tc
c) the additional revenue it gets is above the additonal costs
d) the tr it gets is above the tc
answer
c
question
other things equal, when the extra output obtained from hiring the 5th worker is smaller than the extra output obtained from hiring the 4th worker:
a) mc will fall
b) mc will rise
C) mp must rise
d) ac must fall
a) mc will fall
b) mc will rise
C) mp must rise
d) ac must fall
answer
b
question
if your restaurant got the "best in midwest" award whichof th e following would most likely happen
a) demand curve would shift inward
b) demand curve would shift outward
c) supply curve would become indefinitely inelastic
d) quantity demanded would drop
a) demand curve would shift inward
b) demand curve would shift outward
c) supply curve would become indefinitely inelastic
d) quantity demanded would drop
answer
b
question
a price elasticity of 0.5 means
a) demand is elastic
b) quantity demanded changes 0.5% for each 1% change in price
c) quantity demanded changes 0.5 units for each 1% change in price
d) quantuty demanded changes 5% for each 1% change in price
a) demand is elastic
b) quantity demanded changes 0.5% for each 1% change in price
c) quantity demanded changes 0.5 units for each 1% change in price
d) quantuty demanded changes 5% for each 1% change in price
answer
b
question
according to the law of demand and increase in the price of gas will
a) decrease the quantity demanded of gas other things constant
b) decrease the demand for gas
c) increase the quantity demanded for gas all other things constant
d) increase the demand for gas
a) decrease the quantity demanded of gas other things constant
b) decrease the demand for gas
c) increase the quantity demanded for gas all other things constant
d) increase the demand for gas
answer
a
question
a price ceiling creates a shortage by
a) increasing the quantity supplied relative to equilibrium
b) decreasing the quantity supplied relative to equilibrium
c) increasing prod costs
d) changing the elasticity of demand
a) increasing the quantity supplied relative to equilibrium
b) decreasing the quantity supplied relative to equilibrium
c) increasing prod costs
d) changing the elasticity of demand
answer
b
question
as a consumer moves along an indifference curve: a) prices and income are held constant but total utility changes
b) prices held constant but income changes
c) total utility is held constant but prices and income changes
d) income is held constant but prices change
b) prices held constant but income changes
c) total utility is held constant but prices and income changes
d) income is held constant but prices change
answer
d
question
the mc curve:
a) declines until atc increases
b) first rises then declines
c) never becomes a firms supply curve
d) rises when the point of diminishing marginal product is reached
a) declines until atc increases
b) first rises then declines
c) never becomes a firms supply curve
d) rises when the point of diminishing marginal product is reached
answer
d
question
breakeven point is when:
a) zero economic profit
b) zero tr
c) zero tc
d) already exited in the short run
a) zero economic profit
b) zero tr
c) zero tc
d) already exited in the short run
answer
a
question
mp tells:
a) the additional profit from adding one worker
b) the additional number of worker needed to increase output by 1%
c) the additional output from adding one worker
d) the additional number of workers needed to increse output by 1
a) the additional profit from adding one worker
b) the additional number of worker needed to increase output by 1%
c) the additional output from adding one worker
d) the additional number of workers needed to increse output by 1
answer
c
question
in the short run a firm should shut down immediately if tr is less than
a) tc
b) tfc
c) tvc
d) ac
a) tc
b) tfc
c) tvc
d) ac
answer
c
question
in perfect comp a firms supply curve is taken from its
a) tc curve
b) mc curve
c) ac curve
d) tvc curve
a) tc curve
b) mc curve
c) ac curve
d) tvc curve
answer
b
question
the point at which the mc curve intersects the atc curve is the
a) min ATC
b) max ATC
C) min MC
d) max MC
a) min ATC
b) max ATC
C) min MC
d) max MC
answer
a
question
if the assumption "specialization of labor" was eliminated the MP curve would
a) be a horizontal line then rise
b) rise without falling
c) rise and then fall
d) immediately begin falling
a) be a horizontal line then rise
b) rise without falling
c) rise and then fall
d) immediately begin falling
answer
d
question
long run decisions are
a) constrained bc all inputs are variable
b) constrained because all inputs are fixed
c) constrained bc labor is fixed and all other inputs are variable
d) unconstrained
a) constrained bc all inputs are variable
b) constrained because all inputs are fixed
c) constrained bc labor is fixed and all other inputs are variable
d) unconstrained
answer
d
question
the mr of a firm in perf comp is :
a ) less than selling price
b) more than selling price
c) equal to selling price
d) it depends: sometimes below and sometimes above the selling price
a ) less than selling price
b) more than selling price
c) equal to selling price
d) it depends: sometimes below and sometimes above the selling price
answer
d
question
in perf comp a firm faces a
a) horizontal supply curve
b) horizontal demand curve
c) downward sloping demand curve
d) downward sloping supply curve
a) horizontal supply curve
b) horizontal demand curve
c) downward sloping demand curve
d) downward sloping supply curve
answer
b
question
in the long run of perfectly comp mkts the zero profit condition exists bc:
a) prices rise in the long run
b) prices fall in rhe long run
c) firms can freely enter exit in the long run
d) barriers to entry arise in the long run
a) prices rise in the long run
b) prices fall in rhe long run
c) firms can freely enter exit in the long run
d) barriers to entry arise in the long run
answer
b
question
the ultimate goal of monopoly reg is:
a) to increase quantity produced
b) to avoid economic efficiancy at all costs
c) to destrot monopolies
d) to increase consumer dead weight loss
a) to increase quantity produced
b) to avoid economic efficiancy at all costs
c) to destrot monopolies
d) to increase consumer dead weight loss
answer
a
question
economis efficiency is defined as _______ and ALWAYS exists in ________ markets
a) p=ac regulated monopolistic
b) p=mc perf comp
c) mr=mc perf comp
d) p=ac monopoloistic
a) p=ac regulated monopolistic
b) p=mc perf comp
c) mr=mc perf comp
d) p=ac monopoloistic
answer
b
question
this mkt extracts consumer surplus NEALY perfectly
a) auction mkt
b) pref comp
c) regulated monopoly
d) oligpoly
a) auction mkt
b) pref comp
c) regulated monopoly
d) oligpoly
answer
d
question
if at least one input is fixed the time period for which it is fixed is called the
answer
short run
question
compared to a firm in perf comp, a monopolist produces
a) lower output at lower price
b) larger output at higher prive
c) larger output at lower price
d) lower output at higher price
a) lower output at lower price
b) larger output at higher prive
c) larger output at lower price
d) lower output at higher price
answer
D
question
dwl results from monopoly price being
a) less than mc
b) more thsn mc
c) equal to mc
d) greater than atc
a) less than mc
b) more thsn mc
c) equal to mc
d) greater than atc
answer
b
question
to eliminate economic profits govt regualators will set price equal to
a) mc
b) atc
c) afc
d0avc
a) mc
b) atc
c) afc
d0avc
answer
a
question
product differentiation from many firms is key in this mkt structure
a) perf comp
b) oligpoly
c) monopoly
d) monopolistic comp
a) perf comp
b) oligpoly
c) monopoly
d) monopolistic comp
answer
d
question
monopolistically comp firms will have long run eq prices that
a) is equal to mc
b) is equal to mr
c) exceeds mc
d) exceeds atc
a) is equal to mc
b) is equal to mr
c) exceeds mc
d) exceeds atc
answer
a
question
oligpoly is characterized by
a) many sellers
b) many buyers
c) many barriers to entry
d) high mkt concentration
a) many sellers
b) many buyers
c) many barriers to entry
d) high mkt concentration
answer
a
question
which of the following is not typical with nationalization
a) econimic efficency
b) greater dwl
c) atc rise
d) revenur from other sources are needed to cover operational costs
a) econimic efficency
b) greater dwl
c) atc rise
d) revenur from other sources are needed to cover operational costs
answer
b
question
monopolists face a ______ demand curve
a) vertical
b) horizontal
c) upward sloping
d) downward sloping
a) vertical
b) horizontal
c) upward sloping
d) downward sloping
answer
d
question
avg rev for a monopolist is equal to
a) mr
b) the price the monopolist sets
c) atc
d) none
a) mr
b) the price the monopolist sets
c) atc
d) none
answer
b
question
an increase in the price of food would cause the budget lime to
a) rotate inward
b) shift outward parallel to the budget line
c) rotate outward
d) shift inward parallel to the orig budget line
a) rotate inward
b) shift outward parallel to the budget line
c) rotate outward
d) shift inward parallel to the orig budget line
answer
d
question
economic profit is calculated by
a) tr-tc
b) total expenditure - tc
c) ac- mr
d) normal profit - mr
a) tr-tc
b) total expenditure - tc
c) ac- mr
d) normal profit - mr
answer
a
question
if the quantity of cars supplied to the car market in an area increases 2% when the price goes up 10% the elasticity of supply would be
a) .2
b) .5
c) 2
b) 5
a) .2
b) .5
c) 2
b) 5
answer
b
question
graphically a consumer maximizes utility where:
a) the indifference curve and the budget line have the same slope
b) the slope of the budget line is -1
c) the slope of the indifference curve is -1
d) the slope of the indifference curve is greater than the slope of the budget line
a) the indifference curve and the budget line have the same slope
b) the slope of the budget line is -1
c) the slope of the indifference curve is -1
d) the slope of the indifference curve is greater than the slope of the budget line
answer
a
question
as s manager you have determined that the demand for your good is quite elastic. therefore:
a) increasing theprice of your good will increase revenurs
b) devreasing the price of your good will increase revenues
c) increasing the price of your good will have no impact on the quantity demanded
d) decreasing the price of your good will not impact revenues
a) increasing theprice of your good will increase revenurs
b) devreasing the price of your good will increase revenues
c) increasing the price of your good will have no impact on the quantity demanded
d) decreasing the price of your good will not impact revenues
answer
b
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