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Question
Chapter
12 Quiz
1.
What distinguishes monopolistic competition
from perfect competition?
A.
The number of firms
B.
The ease of entry
and exit
C.
The difficulty new
firms have in entering monopolistic competition as compared with perfect
competition.
D.
In monopolistic competition each firm sells a slightly
different or unique product, that is not the case in perfect competition.
E.
In perfect
competition each firm sells a slightly different or unique product, that is
not the case in monopolistic competition.
2.
Which of the following statements is true?
A.
A monopoly faces
significant threats of entry into the market if economic profits exist.
B.
Monopolistically
competitive firms will never earn economic profits in the short run.
C.
In monopolistically competitive markets, economic
profits will eventually lead to the entry of new firms.
D.
There are high
barriers to entry in perfect competition.
E.
There are high
barriers to entry in monopolistic competition.
3.
In the spring of 2003, Coke introduced a new
drink called Vanilla Coke. In the summer of 2003, Pepsi responded by
marketing its own brand of Pepsi Vanilla. Such moves by firms are known as
A.
long-run equilibrium
in perfect competition.
B.
product differentiation.
C.
price
discrimination.
D.
profit
determination.
E.
extremely stupid to
most informed observers.
4.
Compared with a perfectly competitive
industry, a monopolistically competitive firm
A.
produces a larger
quantity but at a lower price.
B.
produces a larger
quantity at a higher price.
C.
produces the same
quantity, but at a higher price.
D.
produces exactly the
same quantity at exactly the same price.
E.
produces a smaller quantity at a higher price.
5.
Because consumers often possess incomplete
information in markets
A.
gaining information
about products itself may be costly.
B.
brand names provide
valuable information to consumers about the quality of products.
C.
firms often provide
information through marketing.
D.
guarantees can help
to increase consumer confidence in a product.
E.
All of the above
6.
Compared to goods, services
A.
are more tangible.
B.
can usually be
stored for future use.
C.
can be physically
possessed.
D.
are intangible.
E.
can be bought and
sold in markets.
7.
Consumers are willing to pay a higher price
for a brand-name product as opposed to a generic product because
A.
a brand name provides a signal about a product’s
quality and reliability.
B.
they are willing to
pay more for the privilege of watching the firm’s commercials.
C.
a brand-name product
itself is always of higher quality.
D.
consumers maximize
utility by purchasing the most expensive products.
E.
consumers are
irrational.
8.
What characteristic is unique to oligopolistic
firms?
A.
Barriers to entry in
the market
B.
Interdependence of firms
C.
Homogeneous products
D.
Economic profits can
exist in the long run.
E.
Economic profits can
exist in the short run.
9.
The kinked demand curve of an oligopoly firm
implies that
A.
rival firms will not
match a price cut but will follow a price increase.
B.
prices are fairly rigid.
C.
the firms will
collude in establishing price and output.
D.
rival firms will
match neither a price cut nor a price increase.
E.
a firm will not
consider rivals’ reactions in setting price and output.
10.
A price-leadership oligopoly is one in which
A.
a dominant firm in the market sets the price and
other firms follow.
B.
small-market
participants have a strong influence over price.
C.
there is a large
kink in the demand curve.
D.
a prisoner’s dilemma
exists.
E.
all firms face
downward-sloping demand curves.
Quiz Chapter 13
1.
The text argues that
one reason that governments may intervene in the operation of a business
through regulation is to
A.
increase monopoly
profits.
B.
reduce the amount of
information consumers have about a product.
C.
promote competitive behavior.
D.
promote
non-competitive behavior.
E.
All of the above
2.
In the United States, antitrust policy is defined by
A.
the Sherman
Antitrust Act of 1890.
B.
the Clayton
Antitrust Act of 1914.
C.
the Federal Trade
Commission Act of 1914.
D.
All of the above
E.
None of the above
3.
According to the text, an unreasonable monopolistic activity
A.
is impossible to
define.
B.
is the
responsibility of the FTC.
C.
is the
responsibility of the Justice Department.
D.
is defined according to whether a rule of reason or a
per se rule is used.
E.
is defined in
absolute terms by the Antitrust Division.
4.
According to antitrust policy, market power is
A.
based on the ability
to control prices.
B.
based on the ability
to price discriminate.
C.
any concentration
ratio above 50 percent.
D.
the share of the market held by a firm.
E.
based on an attempt
to monopolize.
5.
In antitrust cases, the most commonly used measure of market
concentration is known as
A.
the Herfindahl index.
B.
the Concentration
index.
C.
the Von Neumann
index.
D.
the Taylor index.
E.
the Market index.
6.
The term level playing field implies
A.
the desire to limit
the number of firms that are allowed to operate within certain industries.
B.
the desire to
redistribute wealth from the extremely rich to those living in poverty.
C.
the desire to give
government employees something important to do.
D.
the desire to enhance the competitive environment.
E.
the ultimate goal of
creating a utopian society.
7.
Which of the following is an industry that has not been
deregulated in the United States since 1980?
A.
Trucking
B.
Air transportation
C.
Telecommunications
D.
Financial services
E.
Internet service providers
8.
Overall, the weight of evidence with regard to regulating the
economy
A.
shows that
regulation has been counterproductive in the past because government
regulators were not held publicly accountable for their actions as they are
today.
B.
shows that
regulatory agencies systematically pursue the public’s best interest.
C.
is in favor of more
economic regulation.
D.
is inconclusive as to whether there should be more or
less economic regulation.
E.
is in favor of less
economic regulation.
9.
While the United States was deregulating industries, the rest of
the world was
A.
privatizing industries.
B.
nationalizing
industries.
C.
awaiting the
outcome.
D.
regulating
industries.
E.
reregulating
industries.
10.
Which of the following
is involved with international regulation?
A.
The General Agreement on Tariffs and Trade
B.
The World Trade Organization
C.
The Multilateral
Agreement on Investment
D.
A and B.
E.
None of the above
Chapter 14 Quiz
1.
A market failure occurs when
A.
the market outcome
is viewed as unfair by a majority of consumers.
B.
a market fails to
provide the good at a zero price.
C.
quantity demanded
exceeds quantity supplied.
D.
the market outcome is not the socially efficient
outcome.
E.
markets produce the
socially efficient level of output.
2.
The social costs of production
A.
include all costs involved in production.
B.
equal the private
costs minus the value of the externality.
C.
are less than the
private costs of production when negative externalities exist.
D.
are included in the
private supply curve.
E.
All of the above
3.
A potential remedy for the problem of negative externalities is
A.
a subsidy to
producers so that they produce more.
B.
a subsidy to
consumers so that they consume more.
C.
a tax based on the external costs of production and
consumption.
D.
a tax that increases
production and consumption.
E.
an increase in
income taxes so that the government can hire more bureaucrats to solve the
problem.
4.
One advantage of marketable pollution permits is that
A.
they provide a
significant source of revenue for the government.
B.
they allow others in society to influence the level
of externalities by purchasing the permits themselves.
C.
firms have no
incentives to purchase the permits.
D.
the firms with the
least costly methods of pollution reduction will be the first to purchase
the permits.
E.
All of the above
5.
The problem of common ownership arises due to
A.
the fact that
benefits are shared in common.
B.
a lack of clearly defined property rights.
C.
the fact that costs
accrues solely to the individual, but the benefits go to the society as a
whole.
D.
the internalization
of external costs.
E.
the fact that most
people are cranky.
6.
Many species, such as the Hawksbill sea turtle, Asian rhino, and
whale sharks, have been hunted close to extinction. One reason why so many
species are close to extinction is
A.
a lack of common
ownership.
B.
a lack of private ownership.
C.
that the market
prices of the products derived from the animals are inefficiently low.
D.
that there is no
demand for the animals.
E.
high rates of
suicide among endangered species.
7.
The principle of mutual exclusivity states that
A.
economics and
politics are mutually exclusive.
B.
the owner of a good has the right to exclude others
from using that good.
C.
it is costly to
exclude individuals from consuming public goods.
D.
negative
externalities are exclusive to producers of goods and services.
E.
mutual funds should
be purchased instead of stocks.
8.
Compared to the demand for a privately provided good, the demand
for a public good is likely to be
A.
less than the demand for a similar private good
because individuals can consume the good without having to pay for it.
B.
identical to the
demand for a similar private good.
C.
greater than the
demand for a similar private good, because more than one consumer can
consume the good at the same time.
D.
easier to determine
because everyone pays the same price.
E.
None of the above
9.
Market failure occurs
A.
when governments
levy taxes on business firms.
B.
when governments
levy taxes on workers.
C.
when perfectly competitive markets do not achieve
economic efficiency.
D.
whenever governments
intervene in the decision-making processes of perfectly competitive markets.
E.
when markets produce
an income distribution that is not equitable.
10.
For public goods
A.
the principle of
mutual exclusivity holds strongly.
B.
one individual’s
consumption of a good prohibits others from consuming that good.
C.
the principle of mutual exclusivity does not apply.
D.
costs are imposed on
individuals not directly involved in the transaction.
E.
None of the above
Chapter 15 Quiz
1.
Which of the following is a resource?
A.
Stocks
B.
Money
C.
Entrepreneurial ability
D.
Pollution
E.
Bonds
2.
The demand for a resource is
A.
a derived demand.
B.
always unit elastic.
C.
likely to increase
with decreases in resource price.
D.
a direct
relationship between resource price and quantity demanded.
E.
an inverse
relationship between quantity available and quantity demanded.
3.
The resource market is the same as the product market except
that, in the resource market
A.
the demand curve
slopes up.
B.
buyers and sellers are reversed.
C.
there is no
substitution effect.
D.
the supply curve
slopes down.
E.
there is no income
effect.
4.
When a resource becomes more productive, that is, when each unit
of the resource can produce more output
A.
the firm will use more of the resource.
B.
the firm will use
less of the resource.
C.
the firm will not
change its use of the resource.
D.
the resource becomes
scarce.
E.
the resource becomes
expensive.
5.
According to the text, the market demand for a resource
A.
consists of the
demands of each firm willing to pay for a resource.
B.
consists of the
demands of each firm able to pay for a resource.
C.
consists of the demands of each firm willing and able
to pay for a resource.
D.
is the same as the
firm’s demand for a resource.
E.
depends on distinct
elements for every firm.
6.
According to the text, a business is much like an individual in
the sense that they both
A.
decide how much they are willing to pay for something
by deciding how much that something is worth to them.
B.
decide how much they
are willing to pay for something by deciding how much others are willing to
pay.
C.
decide how much they
are willing to pay for something by deciding how much that something costs.
D.
decide how much they
are willing to pay for something by deciding how much of that something is
available.
E.
use resources.
7.
The marginal-physical product is the
A.
total output divided
by the total cost.
B.
quantity of a
resource divided by total product.
C.
change in output
associated with a change in total cost.
D.
additional output
associated with an additional unit of a fixed resource.
E.
additional output associated with an additional unit
of a variable resource.
8.
The marginal-factor cost of labor
A.
is less than the
wage rate for all workers employed after the first for a monopsony.
B.
is the extra cost to the firm of employing one
additional worker.
C.
equals the wage rate
when the monopsonist is employing the profit maximizing quantity of labor.
D.
curve lies below the
market demand for labor curve for a monopsony.
E.
is the extra cost of
producing one additional unit of output.
9.
The supply of resources
A.
is represented by a
vertical supply curve.
B.
is likely to become
less elastic over time as resources are used up.
C.
identifies the quantities that will be available for
sale at different prices.
D.
is absolutely fixed
because there are only so many units available at any moment.
E.
is irrelevant in
determining resource price.
10.
The payment needed to keep a resource in its current use depends
mostly on
A.
the resource’s opportunity cost.
B.
the taxes paid by
the resource’s owner.
C.
the taxes paid by
the resource’s user.
D.
the resource’s
economic rent.
E.
the derived demands
for other resources.

 

Solution ID:393734 | This paper was updated on 26-Nov-2015

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