Question 1

An oligopolistic market

Accepted Answer

A)  has a small number of rival firms, and each is large relative to the size of the market. 
B)  is characterized by firms that merely take the price that is determined by the forces of supply and demand in the market. 
C)  has low entry barriers facing firms that may be interested in entering the market. 
D)  has a large number of firms that are small relative to the size of the market. 
A)  has a small number of rival firms, and each is large relative to the size of the market. 
B)  is characterized by firms that merely take the price that is determined by the forces of supply and demand in the market. 
C)  has low entry barriers facing firms that may be interested in entering the market. 
D)  has a large number of firms that are small relative to the size of the market.

Question 2

In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will

Accepted Answer

A)  lower price to expand revenue possibilities. 
B)  reduce output and raise price. 
C)  maintain the current price if profit is still positive. 
D)  increase plant size to lower marginal cost. 
E)  decrease plant size to lower marginal cost. 
A)  lower price to expand revenue possibilities. 
B)  reduce output and raise price. 
C)  maintain the current price if profit is still positive. 
D)  increase plant size to lower marginal cost. 
E)  decrease plant size to lower marginal cost.

Question 3

No questions exist for this section.

Accepted Answer

The sectio

Question 4

Use the figure to answer the following question(s).
Figure 11-13  
-If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

Accepted Answer

A)  price, $10; output, 600 
B)  price, $20; output, 400 
C)  price, $25; output, 300 
D)  price, $30; output, 200 
A)  price, $10; output, 600 
B)  price, $20; output, 400 
C)  price, $25; output, 300 
D)  price, $30; output, 200

Question 5

A law that requires hairdressers to undergo many hours of training and acquire a license before they can offer haircuts to the public is an example of a

Accepted Answer

A)  positive externality. 
B)  natural monopoly. 
C)  barrier to entry. 
D)  public good. 
A)  positive externality. 
B)  natural monopoly. 
C)  barrier to entry. 
D)  public good.

Question 6

Which of the following most accurately reflects the pattern of changes in the earth's temperature?

Accepted Answer

A)  The earth's temperature has risen by approximately 3 degrees Fahrenheit during the past century and most of the increase has occurred since 2000. 
B)  The earth's temperature has fallen by approximately 2 degrees Fahrenheit during the past century. 
C)  The earth's temperature has risen by approximately 1.4 degrees Fahrenheit during the past century. 
D)  There has been virtually no change in the earth's temperature for at least the past 1000 years. 
A)  The earth's temperature has risen by approximately 3 degrees Fahrenheit during the past century and most of the increase has occurred since 2000. 
B)  The earth's temperature has fallen by approximately 2 degrees Fahrenheit during the past century. 
C)  The earth's temperature has risen by approximately 1.4 degrees Fahrenheit during the past century. 
D)  There has been virtually no change in the earth's temperature for at least the past 1000 years.

Question 7

When a park is funded by visitors but not by taxpayers in general,

Accepted Answer

A)  there will be too few parks because most people will not pay to use a park. 
B)  visitors will be better served because poor service would lead to reductions in revenues. 
C)  park budgets will decline. 
D)  park quality will decline. 
A)  there will be too few parks because most people will not pay to use a park. 
B)  visitors will be better served because poor service would lead to reductions in revenues. 
C)  park budgets will decline. 
D)  park quality will decline.

Question 8

What should a profit maximizing monopolist do if she is currently producing where MC < MR?

Accepted Answer

A)  Increase output until MC = MR. 
B)  Decrease output until MC = MR. 
C)  Shut down in the long run. 
D)  Keep producing at this level. 
E)  Operate only in the short run. 
A)  Increase output until MC = MR. 
B)  Decrease output until MC = MR. 
C)  Shut down in the long run. 
D)  Keep producing at this level. 
E)  Operate only in the short run.

Question 9

Which of the following increases the likelihood that a group of sellers can increase profits as the result of collusion?

Accepted Answer

A)  the presence of a large number of firms in the industry 
B)  intense quality competition among firms 
C)  low barriers to entry into the industry 
D)  a stable demand for the product 
A)  the presence of a large number of firms in the industry 
B)  intense quality competition among firms 
C)  low barriers to entry into the industry 
D)  a stable demand for the product

Question 10

Use the figure to answer the following question(s).
Figure 11-6  
-The demand and cost conditions in an industry are as depicted in Figure 11-6. In the viewpoint of economic efficiency, what would the ideal price and output be?

Accepted Answer

A)  price, P1; quantity produced, Q1 
B)  price, P2; quantity produced, Q2 
C)  price, P3; quantity produced, Q1 
D)  price, P1; quantity produced, Q2 
A)  price, P1; quantity produced, Q1 
B)  price, P2; quantity produced, Q2 
C)  price, P3; quantity produced, Q1 
D)  price, P1; quantity produced, Q2

Question 11

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Accepted Answer

A)  extremely high because policies that would significantly reduce emissions will adversely affect economic growth. 
B)  insignificant compared to the probable impact of warming from those emissions. 
C)  irrelevant because each aspect of the environment is important enough to justify full protection from environmental change, at whatever cost is necessary. 
D)  zero because fuel cost savings alone will offset all opportunity costs. 
A)  extremely high because policies that would significantly reduce emissions will adversely affect economic growth. 
B)  insignificant compared to the probable impact of warming from those emissions. 
C)  irrelevant because each aspect of the environment is important enough to justify full protection from environmental change, at whatever cost is necessary. 
D)  zero because fuel cost savings alone will offset all opportunity costs.

Question 12

Cartel members have an incentive to cheat on cartel agreements because

Accepted Answer

A)  the cartel cannot maximize profits. 
B)  the cartel price is the competitive price. 
C)  the demand curve for the firm is more elastic than the cartel's demand curve. 
D)  the industry profit would be higher under competitive conditions. 
A)  the cartel cannot maximize profits. 
B)  the cartel price is the competitive price. 
C)  the demand curve for the firm is more elastic than the cartel's demand curve. 
D)  the industry profit would be higher under competitive conditions.

Question 13

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

Accepted Answer

A)  declare the relevant resources to be public goods, owned by the public. 
B)  establish and enforce property rights for the resources that are being damaged, if possible. 
C)  allow the government to take over and control all natural resources. 
D)  enact legislation that makes all environmental pollution illegal. 
A)  declare the relevant resources to be public goods, owned by the public. 
B)  establish and enforce property rights for the resources that are being damaged, if possible. 
C)  allow the government to take over and control all natural resources. 
D)  enact legislation that makes all environmental pollution illegal.

Question 14

When is the definition and enforcement of property rights especially difficult?

Accepted Answer

A)  When many polluters harm a large group of people with the same pollutant. 
B)  When a single polluter is harming a single person or entity. 
C)  When land is owned by a corporation. 
D)  When the benefits of prosecution are clear. 
A)  When many polluters harm a large group of people with the same pollutant. 
B)  When a single polluter is harming a single person or entity. 
C)  When land is owned by a corporation. 
D)  When the benefits of prosecution are clear.

Question 15

"Market power" is an expression used to indicate that a firm has

Accepted Answer

A)  no rivals. 
B)  the power to sell a given output at whatever price it chooses. 
C)  some freedom from the rigors of intense competition. 
D)  a monopoly over the product it produces. 
A)  no rivals. 
B)  the power to sell a given output at whatever price it chooses. 
C)  some freedom from the rigors of intense competition. 
D)  a monopoly over the product it produces.

Question 16

Figure 11-16  
-Refer to Figure 11-16. To maximize its profit, a monopolist would choose which of the following outcomes?

Accepted Answer

A)  100 units of output and a price of $10 per unit 
B)  100 units of output and a price of $20 per unit 
C)  150 units of output and a price of $15 per unit 
D)  200 units of output and a price of $20 per unit 
A)  100 units of output and a price of $10 per unit 
B)  100 units of output and a price of $20 per unit 
C)  150 units of output and a price of $15 per unit 
D)  200 units of output and a price of $20 per unit

Question 17

Which of the following will be an obstacle to oligopolistic collusion in a market?

Accepted Answer

A)  government regulations restricting entry 
B)  a relatively small number of oligopolistic firms 
C)  unstable demand conditions 
D)  uniform products 
A)  government regulations restricting entry 
B)  a relatively small number of oligopolistic firms 
C)  unstable demand conditions 
D)  uniform products

Question 18

An industry is said to be a natural monopoly when

Accepted Answer

A)  legal barriers limit entry into the market. 
B)  diseconomies of scale are present in the market. 
C)  the market demand for the product supplied by a firm is inelastic. 
D)  long-run ATC continues to decline as firm size increases. 
E)  larger firms have higher per-unit costs than their smaller rivals. 
A)  legal barriers limit entry into the market. 
B)  diseconomies of scale are present in the market. 
C)  the market demand for the product supplied by a firm is inelastic. 
D)  long-run ATC continues to decline as firm size increases. 
E)  larger firms have higher per-unit costs than their smaller rivals.

Question 19

A monopolist has less to gain from cost-saving measures in the production process when

Accepted Answer

A)  the monopoly is unregulated. 
B)  regulators use average cost pricing to set the monopolist's price. 
C)  the demand for the product of the monopolist is inelastic. 
D)  changes in the regulated price occur only after considerable delay. 
A)  the monopoly is unregulated. 
B)  regulators use average cost pricing to set the monopolist's price. 
C)  the demand for the product of the monopolist is inelastic. 
D)  changes in the regulated price occur only after considerable delay.

Question 20

Use the figure to answer the following question(s).
Figure 11-7  
-The demand and cost conditions in an industry are as depicted in Figure 11-7. In the viewpoint of economic efficiency, what would the ideal price and output be?

Accepted Answer

A)  price, $7; quantity produced, 100 
B)  price, $10; quantity produced, 170 
C)  price, $14; quantity produced, 100 
D)  price, $7; quantity produced, 200 
A)  price, $7; quantity produced, 100 
B)  price, $10; quantity produced, 170 
C)  price, $14; quantity produced, 100 
D)  price, $7; quantity produced, 200

An oligopolistic market

In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will

No questions exist for this section.

Use the figure to answer the following question(s). Figure 11-13 -If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

A law that requires hairdressers to undergo many hours of training and acquire a license before they can offer haircuts to the public is an example of a

Which of the following most accurately reflects the pattern of changes in the earth's temperature?

When a park is funded by visitors but not by taxpayers in general,

What should a profit maximizing monopolist do if she is currently producing where MC < MR?

Which of the following increases the likelihood that a group of sellers can increase profits as the result of collusion?

Use the figure to answer the following question(s). Figure 11-6 -The demand and cost conditions in an industry are as depicted in Figure 11-6. In the viewpoint of economic efficiency, what would the ideal price and output be?

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Cartel members have an incentive to cheat on cartel agreements because

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

When is the definition and enforcement of property rights especially difficult?

"Market power" is an expression used to indicate that a firm has

Figure 11-16 -Refer to Figure 11-16. To maximize its profit, a monopolist would choose which of the following outcomes?

Which of the following will be an obstacle to oligopolistic collusion in a market?

An industry is said to be a natural monopoly when

A monopolist has less to gain from cost-saving measures in the production process when

Use the figure to answer the following question(s). Figure 11-7 -The demand and cost conditions in an industry are as depicted in Figure 11-7. In the viewpoint of economic efficiency, what would the ideal price and output be?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 11: Price-Searcher Markets With High Entry Barriers

An oligopolistic market

In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will

No questions exist for this section.

Use the figure to answer the following question(s). Figure 11-13 -If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

A law that requires hairdressers to undergo many hours of training and acquire a license before they can offer haircuts to the public is an example of a

Which of the following most accurately reflects the pattern of changes in the earth's temperature?

When a park is funded by visitors but not by taxpayers in general,

What should a profit maximizing monopolist do if she is currently producing where MC < MR?

Which of the following increases the likelihood that a group of sellers can increase profits as the result of collusion?

Use the figure to answer the following question(s). Figure 11-6 -The demand and cost conditions in an industry are as depicted in Figure 11-6. In the viewpoint of economic efficiency, what would the ideal price and output be?

The opportunity cost of slowing global warming by reducing carbon dioxide emissions is

Cartel members have an incentive to cheat on cartel agreements because

Economic analysis implies that one of the most effective ways to deal with potential damages from environmental pollution is to

When is the definition and enforcement of property rights especially difficult?

"Market power" is an expression used to indicate that a firm has

Figure 11-16 -Refer to Figure 11-16. To maximize its profit, a monopolist would choose which of the following outcomes?

Which of the following will be an obstacle to oligopolistic collusion in a market?

An industry is said to be a natural monopoly when

A monopolist has less to gain from cost-saving measures in the production process when

Use the figure to answer the following question(s). Figure 11-7 -The demand and cost conditions in an industry are as depicted in Figure 11-7. In the viewpoint of economic efficiency, what would the ideal price and output be?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters