Question 1

-The above figure shows the market for steel ingots. If the market is competitive, then

Accepted Answer

A) the socially optimal quantity of steel is zero. 
B) the socially optimal quantity of steel of 50 units is produced. 
C) the socially optimal quantity of steel of 100 units is produced. 
D) more than the socially optimal quantity of 50 units of steel is produced. 
A) the socially optimal quantity of steel is zero. 
B) the socially optimal quantity of steel of 50 units is produced. 
C) the socially optimal quantity of steel of 100 units is produced. 
D) more than the socially optimal quantity of 50 units of steel is produced.

Question 2

A rival good

Accepted Answer

A) is one that is used up as it is consumed. 
B) is one that rival firms are trying to obtain. 
C) is exclusive. 
D) cannot be shared. 
A) is one that is used up as it is consumed. 
B) is one that rival firms are trying to obtain. 
C) is exclusive. 
D) cannot be shared.

Question 3

-The above figure shows the market for steel ingots. The optimal quantity of pollution

Accepted Answer

A) is 0 units. 
B) is 50 units. 
C) is 100 units. 
D) cannot be determined from the information provided. 
A) is 0 units. 
B) is 50 units. 
C) is 100 units. 
D) cannot be determined from the information provided.

Question 4

Mergers are closely scrutinized by the government because

Accepted Answer

A) they might allow the firms involved to dominate the market and act as a legalized cartel (monopoly). 
B) they always result in a more efficient market. 
C) they always result in lower joint profits of the firms involved. 
D) all mergers are undesirable. 
A) they might allow the firms involved to dominate the market and act as a legalized cartel (monopoly). 
B) they always result in a more efficient market. 
C) they always result in lower joint profits of the firms involved. 
D) all mergers are undesirable.

Question 5

Which of the following is a Pareto improvement?

Accepted Answer

A) A monopolist loses its monopoly when a government policy allows another firm to enter the market, resulting in lower prices and higher quantity available for consumers. 
B) A government policy is implemented that results in the middle class being better off, and the very rich only have to pay a little bit more in taxes. 
C) A government policy removes a market failure. 
D) None of the above. 
A) A monopolist loses its monopoly when a government policy allows another firm to enter the market, resulting in lower prices and higher quantity available for consumers. 
B) A government policy is implemented that results in the middle class being better off, and the very rich only have to pay a little bit more in taxes. 
C) A government policy removes a market failure. 
D) None of the above.

Question 6

If a government policy change harms a monopolist, the government could

Accepted Answer

A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. 
B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. 
C) do nothing, because the change is a Pareto improvement. 
D) It is not possible to mitigate the harm to a monopolist. 
A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. 
B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. 
C) do nothing, because the change is a Pareto improvement. 
D) It is not possible to mitigate the harm to a monopolist.

-The above figure shows the market for steel ingots. If the market is competitive, then

A rival good

-The above figure shows the market for steel ingots. The optimal quantity of pollution

Mergers are closely scrutinized by the government because

Which of the following is a Pareto improvement?

If a government policy change harms a monopolist, the government could

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Global Business

Filters

Exam 16: Government and Business

-The above figure shows the market for steel ingots. If the market is competitive, then

A rival good

-The above figure shows the market for steel ingots. The optimal quantity of pollution

Mergers are closely scrutinized by the government because

Which of the following is a Pareto improvement?

If a government policy change harms a monopolist, the government could

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Global Business

Filters