Question 1

Marginal revenue for a monopolist is less than the price it charges for its product.

Accepted Answer

A) True 
 B)False

Question 2

Government regulation is appropriate when there is market failure and regulation is cost-effectivE.

Accepted Answer

A) True 
 B)False

Question 3

The Following Questions Refer to the graph below.  
-At what level(s)of output do reductions in the average costs of production cease?

Accepted Answer

A) 0 
B) 0 - Q0 
C) Q0 
D) Above Q0 
E) There are no reductions in the average costs of production 
A) 0 
B) 0 - Q0 
C) Q0 
D) Above Q0 
E) There are no reductions in the average costs of production

Question 4

The Following Questions Refer to the graph below,showing a monopoly market.  
-If this were a perfectly competitive market,equilibrium price and quantity would be

Accepted Answer

A) $20 and 50 
B) $15 and 70 
C) $15 and 50 
D) $10 and 50 
E) $10 and 70 
A) $20 and 50 
B) $15 and 70 
C) $15 and 50 
D) $10 and 50 
E) $10 and 70

Question 5

If a firm sells 100 units of output at a price of $5 and each unit costs $3 to produce,the firm's total revenue equals

Accepted Answer

A) $3 
B) $5 
C) $200 
D) $300 
E) $500 
A) $3 
B) $5 
C) $200 
D) $300 
E) $500

Question 6

In a perfectly competitive industry the four-firm concentration ratio is close to zero.

Accepted Answer

A) True 
 B)False

Question 7

The capture theory of regulation suggests that government regulation of business represents an unfair attack on private firms by government.

Accepted Answer

A) True 
 B)False

Question 8

Profits and losses in a private enterprise economic system

Accepted Answer

A) Contribute toward a breakdown of the system 
B) Lead to a monopolization of the industries in which they occur 
C) Show where productive capacity should be expanded and where it should be contracted 
D) Do all of the above 
E) Do both (a)and (b) 
A) Contribute toward a breakdown of the system 
B) Lead to a monopolization of the industries in which they occur 
C) Show where productive capacity should be expanded and where it should be contracted 
D) Do all of the above 
E) Do both (a)and (b)

Question 9

A telephone is much more useful to a consumer when other people also have telephones.This illustrates which of the following concepts?

Accepted Answer

A) Economies of scale 
B) Diseconomies of scale 
C) Natural monopoly 
D) Network economies 
E) Constant returns to scale 
A) Economies of scale 
B) Diseconomies of scale 
C) Natural monopoly 
D) Network economies 
E) Constant returns to scale

Question 10

Natural monopolies are common in the modern world economy.

Accepted Answer

A) True 
 B)False

Question 11

The "agency problem" is caused by

Accepted Answer

A) Corporate managers pursuing goals different from stockholder's goals 
B) Stockholders attempting to micromanage corporations 
C) Regulatory agencies interfering with corporate operations 
D) Sudden declines in stock prices 
E) Over-investment in new capital 
A) Corporate managers pursuing goals different from stockholder's goals 
B) Stockholders attempting to micromanage corporations 
C) Regulatory agencies interfering with corporate operations 
D) Sudden declines in stock prices 
E) Over-investment in new capital

Question 12

The monopoly power of a firm can be measured by the firm's

Accepted Answer

A) Profits relative to other firms in the industry 
B) Control over the demand for its product 
C) Revenues as a percent of industry revenues 
D) Prices compared to average prices in the industry 
E) Control over the market supply of its product 
A) Profits relative to other firms in the industry 
B) Control over the demand for its product 
C) Revenues as a percent of industry revenues 
D) Prices compared to average prices in the industry 
E) Control over the market supply of its product

Question 13

Barriers to entry are often created by governments.

Accepted Answer

A) True 
 B)False

Question 14

To maximize profits,a competitive firm produces the output level at which

Accepted Answer

A) Its total receipts are greatest 
B) Its total costs are minimum 
C) Its marginal cost equals its marginal revenue 
D) Its total costs equal its total receipts 
E) None of the above 
A) Its total receipts are greatest 
B) Its total costs are minimum 
C) Its marginal cost equals its marginal revenue 
D) Its total costs equal its total receipts 
E) None of the above

Question 15

Without barriers to entry,a high-profit monopoly is unlikely to be able to maintain its monopoly status.

Accepted Answer

A) True 
 B)False

Question 16

Suppose the U.S.auto industry sells 1,000 autos per year.Of this,GM sells 400,Ford 300,and Dodge 250.Given this information,the four-firm concentration ratio of the industry must be at least

Accepted Answer

A) 95% 
B) 5% 
C) 50% 
D) 100% 
E) Cannot tell without further information 
A) 95% 
B) 5% 
C) 50% 
D) 100% 
E) Cannot tell without further information

Question 17

Market failure,by itself,is enough to justify government regulation of business.

Accepted Answer

A) True 
 B)False

Question 18

Monopoly refers to

Accepted Answer

A)  A large firm 
B)  A firm that is one of a few firms in an industry 
C)  A single seller of a product for which there are no good substitutes 
D)  A firm that refuses to lower its price 
E)  All of the above 
A)  A large firm 
B)  A firm that is one of a few firms in an industry 
C)  A single seller of a product for which there are no good substitutes 
D)  A firm that refuses to lower its price 
E)  All of the above

Question 19

Which of the following is true of a firm's total costs? They

Accepted Answer

A) Do not include opportunity costs 
B) Become lower as more is produced 
C) Are greater than total revenue when the firm is earning a profit 
D) Are equal to the cost per unit times the number of units produced 
E) All of the above 
A) Do not include opportunity costs 
B) Become lower as more is produced 
C) Are greater than total revenue when the firm is earning a profit 
D) Are equal to the cost per unit times the number of units produced 
E) All of the above

Question 20

A guarantee that allows the purchase of shares of stock at a fixed price is a(n)

Accepted Answer

A) Non-pecuniary benefit of employment 
B) Stock option 
C) Disincentive to expand a corporation 
D) Illegal means to compensate CEOs 
E) Stock split 
A) Non-pecuniary benefit of employment 
B) Stock option 
C) Disincentive to expand a corporation 
D) Illegal means to compensate CEOs 
E) Stock split

Marginal revenue for a monopolist is less than the price it charges for its product.

Government regulation is appropriate when there is market failure and regulation is cost-effectivE.

The Following Questions Refer to the graph below. -At what level(s)of output do reductions in the average costs of production cease?

The Following Questions Refer to the graph below,showing a monopoly market. -If this were a perfectly competitive market,equilibrium price and quantity would be

If a firm sells 100 units of output at a price of $5 and each unit costs $3 to produce,the firm's total revenue equals

In a perfectly competitive industry the four-firm concentration ratio is close to zero.

The capture theory of regulation suggests that government regulation of business represents an unfair attack on private firms by government.

Profits and losses in a private enterprise economic system

A telephone is much more useful to a consumer when other people also have telephones.This illustrates which of the following concepts?

Natural monopolies are common in the modern world economy.

The "agency problem" is caused by

The monopoly power of a firm can be measured by the firm's

Barriers to entry are often created by governments.

To maximize profits,a competitive firm produces the output level at which

Without barriers to entry,a high-profit monopoly is unlikely to be able to maintain its monopoly status.

Suppose the U.S.auto industry sells 1,000 autos per year.Of this,GM sells 400,Ford 300,and Dodge 250.Given this information,the four-firm concentration ratio of the industry must be at least

Market failure,by itself,is enough to justify government regulation of business.

Monopoly refers to

Which of the following is true of a firm's total costs? They

A guarantee that allows the purchase of shares of stock at a fixed price is a(n)

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

Marginal revenue for a monopolist is less than the price it charges for its product.

Government regulation is appropriate when there is market failure and regulation is cost-effectivE.

The Following Questions Refer to the graph below. -At what level(s)of output do reductions in the average costs of production cease?

The Following Questions Refer to the graph below,showing a monopoly market. -If this were a perfectly competitive market,equilibrium price and quantity would be

If a firm sells 100 units of output at a price of $5 and each unit costs $3 to produce,the firm's total revenue equals

In a perfectly competitive industry the four-firm concentration ratio is close to zero.

The capture theory of regulation suggests that government regulation of business represents an unfair attack on private firms by government.

Profits and losses in a private enterprise economic system

A telephone is much more useful to a consumer when other people also have telephones.This illustrates which of the following concepts?

Natural monopolies are common in the modern world economy.

The "agency problem" is caused by

The monopoly power of a firm can be measured by the firm's

Barriers to entry are often created by governments.

To maximize profits,a competitive firm produces the output level at which

Without barriers to entry,a high-profit monopoly is unlikely to be able to maintain its monopoly status.

Suppose the U.S.auto industry sells 1,000 autos per year.Of this,GM sells 400,Ford 300,and Dodge 250.Given this information,the four-firm concentration ratio of the industry must be at least

Market failure,by itself,is enough to justify government regulation of business.

Monopoly refers to

Which of the following is true of a firm's total costs? They

A guarantee that allows the purchase of shares of stock at a fixed price is a(n)

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