Question 1

Suppose the external marginal cost of pollution is

Accepted Answer

@#IMG-DLM& and the internal marginal cost is @#IMG-DLM& .Fur

Question 2

An import quota is

Accepted Answer

A) a fixed fee that an importing firm must pay the domestic government in order to have the legal right to sell the product in the domestic market. 
B) the fee an importing firm must pay to the domestic government on each unit it brings into the domestic market. 
C) a restriction limiting the quantity of imported goods that can legally enter a domestic market. 
D) none of the statements associated with this question are correct. 
A) a fixed fee that an importing firm must pay the domestic government in order to have the legal right to sell the product in the domestic market. 
B) the fee an importing firm must pay to the domestic government on each unit it brings into the domestic market. 
C) a restriction limiting the quantity of imported goods that can legally enter a domestic market. 
D) none of the statements associated with this question are correct.

Question 3

If the government regulates a monopoly's price to marginal cost, in the long run

Accepted Answer

A) the monopolist will earn a profit if ATC > MC. 
B) the monopolist will exit the industry. 
C) the monopolist will earn a profit if ATC > P. 
D) the monopolist will earn zero profits. 
A) the monopolist will earn a profit if ATC > MC. 
B) the monopolist will exit the industry. 
C) the monopolist will earn a profit if ATC > P. 
D) the monopolist will earn zero profits.

Question 4

Which of the following raises domestic prices only when demand is relatively low?

Accepted Answer

A) Domestic subsidies. 
B) Lump sum tariff. 
C) Excise tariff. 
D) Lump sum tariff and excise tariff. 
A) Domestic subsidies. 
B) Lump sum tariff. 
C) Excise tariff. 
D) Lump sum tariff and excise tariff.

Question 5

Suppose the supply of wine by domestic firms is

Accepted Answer

@#IMG-DLM& and the supply of wine by foreign firms

Question 6

You are the manager of a monopoly that faces an inverse demand curve

Accepted Answer

@#IMG-DLM& , and has constant average and marginal

Question 7

The domestic demand and supply for sugar are Qd = 40,000 - 200 P and QSD = 10,000 + 300 P.The foreign supply is QSF = 20,000 + 100 P.What is the total supply of sugar in the domestic market?

Accepted Answer

A) Q = 50,000 + 100 P. 
B) Q = 30,000 + 400 P. 
C) Q = 15,000 + 200 P. 
D) Q = 10,000 + 300 P. 
A) Q = 50,000 + 100 P. 
B) Q = 30,000 + 400 P. 
C) Q = 15,000 + 200 P. 
D) Q = 10,000 + 300 P.

Question 8

Non - exclusionary, as it relates to public goods, means that

Accepted Answer

A) no producer can be excluded from providing the good. 
B) no one can be excluded from consuming the good, once it is provided. 
C) the government can only exclude consumers from consuming the good. 
D) producer - consumer rivalry exists. 
A) no producer can be excluded from providing the good. 
B) no one can be excluded from consuming the good, once it is provided. 
C) the government can only exclude consumers from consuming the good. 
D) producer - consumer rivalry exists.

Question 9

Consider the monopoly in the above graph with price regulated at $2 per unit.Deadweight loss resulting from the unregulated monopoly price is _________ than the deadweight loss resulting from the regulated price.

Accepted Answer

A) greater 
B) less 
C) no different 
D) There is insufficient information to determine the difference in the deadweight loss between the regulated and unregulated prices 
A) greater 
B) less 
C) no different 
D) There is insufficient information to determine the difference in the deadweight loss between the regulated and unregulated prices

Question 10

The domestic demand and supply for sugar are Qd = 40,000 - 200P and QSD = 10,000 + 300P.The foreign supply is QSF = 20,000 + 100P.What is the domestic market price of sugar?

Accepted Answer

A) 12.3. 
B) 15.0. 
C) 16.7. 
D) 18.3. 
A) 12.3. 
B) 15.0. 
C) 16.7. 
D) 18.3.

Question 11

Which of the following is true for a monopoly?

Accepted Answer

A) A monopoly always makes a positive profit. 
B) A price ceiling on a monopoly is always desirable. 
C) Price does not equal marginal cost. 
D) A price ceiling on a monopoly is always desirable and price does not equal marginal cost. 
A) A monopoly always makes a positive profit. 
B) A price ceiling on a monopoly is always desirable. 
C) Price does not equal marginal cost. 
D) A price ceiling on a monopoly is always desirable and price does not equal marginal cost.

Question 12

Consider the monopoly in the above graph with price regulated at $2 per unit.Consumer surplus at the regulated price is

Accepted Answer

A) $9. 
B) $8. 
C) $4.50. 
D) There is insufficient information to determine consumer surplus. 
A) $9. 
B) $8. 
C) $4.50. 
D) There is insufficient information to determine consumer surplus.

Question 13

Under the Lanham Act, in concert with the Clayton Act,

Accepted Answer

A) government will sue a firm for false advertising. 
B) rival firms are not eligible to sue another firm for false advertising. 
C) people harmed by deceptive advertising can sue the firm and receive compensation. 
D) rival firms are not eligible to sue another firm for false advertising and people harmed by deceptive advertising can sue the firm and receive compensation. 
A) government will sue a firm for false advertising. 
B) rival firms are not eligible to sue another firm for false advertising. 
C) people harmed by deceptive advertising can sue the firm and receive compensation. 
D) rival firms are not eligible to sue another firm for false advertising and people harmed by deceptive advertising can sue the firm and receive compensation.

Question 14

The gadget industry is comprised of ten firms, each with a 10 percent market share.What is the Herfindahl - Hirschman index for the industry? Based on the U.S.Department of Justice Merger Guidelines described in the text, do you think the Justice Department would be likely to block a merger between two of the firms?

Accepted Answer

HHI = 10,000[10(.10)²] = 1,000.

Question 15

Which cost measures the cost to society of producing a good?

Accepted Answer

A) Internal cost. 
B) External cost. 
C) Social cost. 
D) External cost and social cost. 
A) Internal cost. 
B) External cost. 
C) Social cost. 
D) External cost and social cost.

Question 16

The marginal cost of producing a good to society is the:

Accepted Answer

A) horizontal sum of the supply curve and marginal cost of polluting. 
B) vertical sum of the demand curve and the marginal cost of polluting. 
C) horizontal sum of the demand curve and the marginal cost of polluting. 
D) vertical sum of the supply curve and the marginal cost of polluting. 
A) horizontal sum of the supply curve and marginal cost of polluting. 
B) vertical sum of the demand curve and the marginal cost of polluting. 
C) horizontal sum of the demand curve and the marginal cost of polluting. 
D) vertical sum of the supply curve and the marginal cost of polluting.

Question 17

Acme Water is a privately owned company that is the sole supplier of water to a rural town in Pennsylvania.The owner of the firm has provided the manager of the company an incentive to maximize the firm's profits, and the manager is currently selling 100,000 gallons of water per week at a price of $.05 per gallon.The marginal cost of water is zero, but the firm's average cost of this level of output is $.01 per gallon.
a.Determine Acme Water's profits.
b.Now suppose that local government imposes a price ceiling on water at a price of $.01 per gallon.Will the firm earn economic profits of zero as a result of this price ceiling? Explain.
c.Does the price ceiling of $.01 per gallon result in a shortage of water in Acme's service area?

Accepted Answer

a.Acme's profits are ($.05 - $.01)100,00

Question 18

The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.If the government taxed output at $2 per unit, what would a competitive industry produce?

Accepted Answer

A) 10. 
B) 20. 
C) 15. 
D) 8. 
A) 10. 
B) 20. 
C) 15. 
D) 8.

Question 19

Consider the monopoly in the above graph with price regulated at $2 per unit.Monopoly profits at the regulated price (assuming the presence of fixed costs) are

Accepted Answer

A) $12. 
B) $16. 
C) $5. 
D) There is insufficient information to determine the monopoly profits. 
A) $12. 
B) $16. 
C) $5. 
D) There is insufficient information to determine the monopoly profits.

Question 20

A firm has a constant marginal social cost of producing that equals $2Q.What is the socially efficient level of production for a firm facing an inverse demand P = 60 - 2Q?

Accepted Answer

A) 10. 
B) 15. 
C) 20. 
D) 25. 
A) 10. 
B) 15. 
C) 20. 
D) 25.

Suppose the external marginal cost of pollution is

An import quota is

If the government regulates a monopoly's price to marginal cost, in the long run

Which of the following raises domestic prices only when demand is relatively low?

Suppose the supply of wine by domestic firms is

You are the manager of a monopoly that faces an inverse demand curve

The domestic demand and supply for sugar are Q^d = 40,000 - 200 P and Q^SD = 10,000 + 300 P.The foreign supply is Q^SF = 20,000 + 100 P.What is the total supply of sugar in the domestic market?

Non - exclusionary, as it relates to public goods, means that

Consider the monopoly in the above graph with price regulated at $2 per unit.Deadweight loss resulting from the unregulated monopoly price is _________ than the deadweight loss resulting from the regulated price.

The domestic demand and supply for sugar are Q^d = 40,000 - 200P and Q^SD = 10,000 + 300P.The foreign supply is Q^SF = 20,000 + 100P.What is the domestic market price of sugar?

Which of the following is true for a monopoly?

Consider the monopoly in the above graph with price regulated at $2 per unit.Consumer surplus at the regulated price is

Under the Lanham Act, in concert with the Clayton Act,

Which cost measures the cost to society of producing a good?

The marginal cost of producing a good to society is the:

The external marginal cost of producing coal is MC_external = 6Q while the internal marginal cost is MC_internal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.If the government taxed output at $2 per unit, what would a competitive industry produce?

Consider the monopoly in the above graph with price regulated at $2 per unit.Monopoly profits at the regulated price (assuming the presence of fixed costs) are

A firm has a constant marginal social cost of producing that equals $2Q.What is the socially efficient level of production for a firm facing an inverse demand P = 60 - 2Q?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

Filters

Exam 14: A Managers Guide to Government in the Marketplace

Suppose the external marginal cost of pollution is

An import quota is

If the government regulates a monopoly's price to marginal cost, in the long run

Which of the following raises domestic prices only when demand is relatively low?

Suppose the supply of wine by domestic firms is

You are the manager of a monopoly that faces an inverse demand curve

The domestic demand and supply for sugar are Qd = 40,000 - 200 P and QSD = 10,000 + 300 P.The foreign supply is QSF = 20,000 + 100 P.What is the total supply of sugar in the domestic market?

Non - exclusionary, as it relates to public goods, means that

Consider the monopoly in the above graph with price regulated at $2 per unit.Deadweight loss resulting from the unregulated monopoly price is _________ than the deadweight loss resulting from the regulated price.

The domestic demand and supply for sugar are Qd = 40,000 - 200P and QSD = 10,000 + 300P.The foreign supply is QSF = 20,000 + 100P.What is the domestic market price of sugar?

Which of the following is true for a monopoly?

Consider the monopoly in the above graph with price regulated at $2 per unit.Consumer surplus at the regulated price is

Under the Lanham Act, in concert with the Clayton Act,

Which cost measures the cost to society of producing a good?

The marginal cost of producing a good to society is the:

The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.If the government taxed output at $2 per unit, what would a competitive industry produce?

Consider the monopoly in the above graph with price regulated at $2 per unit.Monopoly profits at the regulated price (assuming the presence of fixed costs) are

A firm has a constant marginal social cost of producing that equals $2Q.What is the socially efficient level of production for a firm facing an inverse demand P = 60 - 2Q?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

Filters

The domestic demand and supply for sugar are Q^d = 40,000 - 200 P and Q^SD = 10,000 + 300 P.The foreign supply is Q^SF = 20,000 + 100 P.What is the total supply of sugar in the domestic market?

The domestic demand and supply for sugar are Q^d = 40,000 - 200P and Q^SD = 10,000 + 300P.The foreign supply is Q^SF = 20,000 + 100P.What is the domestic market price of sugar?

The external marginal cost of producing coal is MC_external = 6Q while the internal marginal cost is MC_internal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.If the government taxed output at $2 per unit, what would a competitive industry produce?