Question 1

When firms earn profits,

Accepted Answer

A) They will likely expand 
B) New firms will have an incentive to enter the market 
C) They are providing a good or service that consumers want more of 
D) The market is signaling more firms to enter 
E) All of the above 
A) They will likely expand 
B) New firms will have an incentive to enter the market 
C) They are providing a good or service that consumers want more of 
D) The market is signaling more firms to enter 
E) All of the above

Question 2

The Following Questions Refer to the graph below,which is for a firm in a competitive market.
  
-Since this is a competitive market,the firm's marginal revenue is

Accepted Answer

A) $5 
B) $7 
C) $20 
D) $100 
E) $150 
A) $5 
B) $7 
C) $20 
D) $100 
E) $150

Question 3

Which of the following is likely to have the most monopoly power?

Accepted Answer

A) Ford Motor Corporation 
B) Your local water company 
C) Mobil Oil Corporation 
D) Avon products (cosmetics) 
E) A fast food restaurant 
A) Ford Motor Corporation 
B) Your local water company 
C) Mobil Oil Corporation 
D) Avon products (cosmetics) 
E) A fast food restaurant

Question 4

The Following Questions Refer to the graph below.  
-Increasing output beyond Q0 will cause the firm to experience

Accepted Answer

A) Economies of scale 
B) Diseconomies of scale 
C) Constant returns to scale 
D) Network economies 
E) Decreasing total costs 
A) Economies of scale 
B) Diseconomies of scale 
C) Constant returns to scale 
D) Network economies 
E) Decreasing total costs

Question 5

Generally monopolists will be more concerned with profit maximization and competitive firms will be more concerned with earning a fair rate of return on investment.

Accepted Answer

A) True 
 B)False

Question 6

The more sellers there are in,the less control any one seller has over the price it can chargE.

Accepted Answer

A) True 
 B)False

Question 7

The most common forms of nonprice competition are

Accepted Answer

A) Profit maximization and loss minimization 
B) Monopolization and output restriction 
C) Advertising and changes in product quality and design 
D) Inflation and unemployment 
E) None of the above 
A) Profit maximization and loss minimization 
B) Monopolization and output restriction 
C) Advertising and changes in product quality and design 
D) Inflation and unemployment 
E) None of the above

Question 8

The Following Questions Refer to the graph below.  
-If this industry starts as perfectly competitive and then becomes a monopoly,market price will change from

Accepted Answer

A) $16 to $12 
B) $16 to $8 
C) $12 to $8 
D) $8 to $16 
E) $12 to $16 
A) $16 to $12 
B) $16 to $8 
C) $12 to $8 
D) $8 to $16 
E) $12 to $16

Question 9

Imperfect competition can best be described as a situation in which

Accepted Answer

A) A few large firms produce and sell a particular product 
B) Many firms produce and sell a product 
C) Only one firm produces and sells a product 
D) Firms exercise some monopoly power 
E) Both (a)and (d) 
A) A few large firms produce and sell a particular product 
B) Many firms produce and sell a product 
C) Only one firm produces and sells a product 
D) Firms exercise some monopoly power 
E) Both (a)and (d)

Question 10

Which of the following is likely to reduce monopoly power in the United States the most?

Accepted Answer

A) Placing an absolute limit on the total assets that any one company can have 
B) Removing all government-imposed entry barriers to industries and occupations 
C) Placing a government ban on television advertising 
D) Placing a special tax on monopolists' outputs 
E) None of the above 
A) Placing an absolute limit on the total assets that any one company can have 
B) Removing all government-imposed entry barriers to industries and occupations 
C) Placing a government ban on television advertising 
D) Placing a special tax on monopolists' outputs 
E) None of the above

Question 11

The Following Questions Refer to the graph below.  
-If this industry is a monopoly,equilibrium price and output in the market will be

Accepted Answer

A) $16 and 10 
B) $12 and 10 
C) $12 and 14 
D) $8 and 14 
E) $8 and 10 
A) $16 and 10 
B) $12 and 10 
C) $12 and 14 
D) $8 and 14 
E) $8 and 10

Question 12

With a natural monopoly,

Accepted Answer

A) The long-run average cost curve of the firm declines over the range of production 
B) Government regulation ensures that consumer's interests will be served 
C) Government regulation will fail 
D) There are no significant economies of scale in producing the good 
E) None of the above 
A) The long-run average cost curve of the firm declines over the range of production 
B) Government regulation ensures that consumer's interests will be served 
C) Government regulation will fail 
D) There are no significant economies of scale in producing the good 
E) None of the above

Question 13

Which of the following would cause an industry's concentration ratio to make it appear less competitive than it really is?

Accepted Answer

A) Firms in the industry are located in one area of the country 
B) Transporting the industry's output is very easy 
C) Foreign firms export the industry's product to the United States 
D) High barriers to entry 
E) All of the above 
A) Firms in the industry are located in one area of the country 
B) Transporting the industry's output is very easy 
C) Foreign firms export the industry's product to the United States 
D) High barriers to entry 
E) All of the above

Question 14

Which of the following is a negative consequence of allowing competition in an industry that is a natural monopoly?

Accepted Answer

A) Deadweight welfare loss 
B) Lower prices 
C) Restricted output 
D) Higher average costs 
E) All of the above 
A) Deadweight welfare loss 
B) Lower prices 
C) Restricted output 
D) Higher average costs 
E) All of the above

Question 15

Approximately what percent of sales in the United States are made by corporations?

Accepted Answer

A) 40 
B) 50 
C) 60 
D) 70 
E) 90 
A) 40 
B) 50 
C) 60 
D) 70 
E) 90

Question 16

Which of the following is a private barrier to entry?

Accepted Answer

A) An occupational license 
B) A patent 
C) Ownership of raw materials 
D) A regulatory commission 
E) All of the above 
A) An occupational license 
B) A patent 
C) Ownership of raw materials 
D) A regulatory commission 
E) All of the above

Question 17

A pure monopoly industry has a 4-firm concentration ratio equal to

Accepted Answer

A) 0 
B) 0.25 
C) 050 
D) 0.9 
E) 1.0 
A) 0 
B) 0.25 
C) 050 
D) 0.9 
E) 1.0

Question 18

Profit equals

Accepted Answer

A) Total revenue minus total cost 
B) Marginal revenue minus marginal cost 
C) Quantity times price 
D) Marginal cost minus marginal revenue 
E) Income minus opportunity cost 
A) Total revenue minus total cost 
B) Marginal revenue minus marginal cost 
C) Quantity times price 
D) Marginal cost minus marginal revenue 
E) Income minus opportunity cost

Question 19

Firms with monopoly power yield higher than average returns to investors.

Accepted Answer

A) True 
 B)False

Question 20

Profits serve no useful purpose in a private enterprise economy and should be taxed away by the government.

Accepted Answer

A) True 
 B)False

When firms earn profits,

The Following Questions Refer to the graph below,which is for a firm in a competitive market. -Since this is a competitive market,the firm's marginal revenue is

Which of the following is likely to have the most monopoly power?

The Following Questions Refer to the graph below. -Increasing output beyond Q₀ will cause the firm to experience

Generally monopolists will be more concerned with profit maximization and competitive firms will be more concerned with earning a fair rate of return on investment.

The more sellers there are in,the less control any one seller has over the price it can chargE.

The most common forms of nonprice competition are

The Following Questions Refer to the graph below. -If this industry starts as perfectly competitive and then becomes a monopoly,market price will change from

Imperfect competition can best be described as a situation in which

Which of the following is likely to reduce monopoly power in the United States the most?

The Following Questions Refer to the graph below. -If this industry is a monopoly,equilibrium price and output in the market will be

With a natural monopoly,

Which of the following would cause an industry's concentration ratio to make it appear less competitive than it really is?

Which of the following is a negative consequence of allowing competition in an industry that is a natural monopoly?

Approximately what percent of sales in the United States are made by corporations?

Which of the following is a private barrier to entry?

A pure monopoly industry has a 4-firm concentration ratio equal to

Profit equals

Firms with monopoly power yield higher than average returns to investors.

Profits serve no useful purpose in a private enterprise economy and should be taxed away by the government.

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Pollution Problems: Must We Foul Our Own Nests

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

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Exam 8: The Economics of Monopoly Power: Can Markets Be Controlled

When firms earn profits,

The Following Questions Refer to the graph below,which is for a firm in a competitive market. -Since this is a competitive market,the firm's marginal revenue is

Which of the following is likely to have the most monopoly power?

The Following Questions Refer to the graph below. -Increasing output beyond Q0 will cause the firm to experience

Generally monopolists will be more concerned with profit maximization and competitive firms will be more concerned with earning a fair rate of return on investment.

The more sellers there are in,the less control any one seller has over the price it can chargE.

The most common forms of nonprice competition are

The Following Questions Refer to the graph below. -If this industry starts as perfectly competitive and then becomes a monopoly,market price will change from

Imperfect competition can best be described as a situation in which

Which of the following is likely to reduce monopoly power in the United States the most?

The Following Questions Refer to the graph below. -If this industry is a monopoly,equilibrium price and output in the market will be

With a natural monopoly,

Which of the following would cause an industry's concentration ratio to make it appear less competitive than it really is?

Which of the following is a negative consequence of allowing competition in an industry that is a natural monopoly?

Approximately what percent of sales in the United States are made by corporations?

Which of the following is a private barrier to entry?

A pure monopoly industry has a 4-firm concentration ratio equal to

Profit equals

Firms with monopoly power yield higher than average returns to investors.

Profits serve no useful purpose in a private enterprise economy and should be taxed away by the government.

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Pollution Problems: Must We Foul Our Own Nests

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

The Following Questions Refer to the graph below. -Increasing output beyond Q₀ will cause the firm to experience