Final

If the quality differences of similar products are mostly imperceptible to the average consumer's eyes, which of the following will most likely play a major role in influencing the decisions of purchasers? A. price of competing products B. size of competing products C. purchaser's opportunity cost D. geographic origin of products

A

When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale, A. the firm is a natural monopoly. B. there are close substitutes for the good the firm produces. C. firm is a single-price monopoly. D. firm is well protected from competition by a legal barrier.

A

40. Refer to the table below. This information reflects the demand curve and the average cost curve for a firm that is a natural monopoly. What will this firm's profits equal? A. $2.50 B. $1.50 C. $1.25 D. $0.50

A

64. The following table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what will their profits equal? A. $650 B. $1,250 C. $2,000 D. $2,250

A

67. Joe owns a restaurant. Many of the restaurants that he competes with recently closed, shifting his perceived demand curve. The following 2 tables show his old and new perceived demand curves. Assume that Joe can only choose from the quantities of output given in the table. By how much does the price that he charges change after the restaurants leave the market? A. increase by 3 B. decrease by 3 C. increase by 4 D. decrease by 4

A

An _________________ is calculated by subtracting the firm's costs from its total revenues, _______________________________ . A. accounting profit; excluding opportunity cost B. accounting profit; including opportunity cost C. economic profit; excluding opportunity cost D. opportunity cost; including economic profit

A

Perfect competition and monopoly stand at _____________ of the spectrum of competition. A. opposite ends B. the high end C. the low end D. the mid-way point

A

Roughly speaking, patent law covers __________ and __________ law protects an author's original books. A. original inventive creations; copyright B. trade secrets; trademark C. all inventions; trademark D. original audiovisual creations; copyright

A

Copyright protection legislation provides protection for original works A. during the author's life plus 70 years B. during the author's life plus 20 years C. until the author is 70 years of age D. until the author is 75 years of age

A

Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency? A. output will be too small and its price too high. B. output will be too large and its price too high. C. output will be too small and its price too low. D. output will be too large and its price too low.

A

For a pure monopoly to exist, A. there is a single seller in a particular industry B. there is only one seller, therefore no industry C. there are a few sellers in a given industry D. there are limited sellers in a particular industry

A

A labor union seeks to __________________ between employers and workers. A. change the balance of negotiations B. change the economic balance C. force employers to deal with individual workers D. lobby government for changes

A. change the balance of negotiations

The U.S. government strongly encouraged unions to be formed in the early 1940s because they held the view that unions would help to A. co-ordinate the all-out production efforts needed during World War II. B. develop uniform procedures for forming unions across the country. C. raise the standard of living of the American people during World War II. D. end the racial discrimination that was prevalent in American workplaces.

A. co-ordinate the all-out production efforts needed during World War II.

Negotiations between unions and a firm or firms is called __________________ . A. collective bargaining B. cooperative bargaining C. united bargaining D. organized bargaining

A. collective bargaining

Although the earnings gap between men and women in the U.S. labor market ___________ in the 1970s, it has _________________________ . A. did not change much; been declining since 1980 B. did not change much; been on the increase since 1980 C. increased, ; been declining since 1980 D. declined, been increasing since 1980

A. did not change much; been declining since 1980

As a result of the American workers' ability to sell their labor though a union, profit-making firms must pay wages A. exceeding the equilibrium wage those firms would otherwise have selected. B. at the intersection of the demand and supply labor curves. C. below the equilibrium wage level those firms would otherwise be able to pay. D. that match the preferred equilibrium wage these firms have selected.

A. exceeding the equilibrium wage those firms would otherwise have selected.

The proportion of workers in a number of the world's high-income economies who belong to unions, when compared to unionized workers in the U.S., is A. very high. B. very low. C. about the same, compared to Canada. D. high, compared to France and Spain.

A. very high

38. Given the data provided in the table below, what will the marginal cost equal for production at quantity (Q) level 4? A. $5.00 B. $4.00 C. $1.00 D. $3.00

B

39. Refer to the table below. The information pertains to the demand curve and the average cost curve for a natural monopoly firm. What will the price be in this market? A. 20 B. 50 C. 35 D. 5

B

46. The following table shows a monopolist's demand curve and cost information for the production of its good. What price will it charge? A. $13 B. $15 C. $11 D. $12

B

50. Refer to the diagram above. At the point marked m, A. price is determining production at a level where P = MC. B. TR is exactly equal to TC, so profits equal zero. C. price is above average cost of production. D. the leftover rectangle is the profit earned.

B

73. A monopolistic competitor has the following information about cost and demand. Then, in the long run equilibrium, the firm will sell this good at what price? A. $5 B. $7 C. $10 D. $14

B

74. A monopolistic competitor has the following information about cost and demand. What will this firm's profits equal in the short run? A. -$55 B. $0 C. $250 D. $280

B

A monopolist is able to maximize its profits by A. setting the price at the level that will maximize its per-unit profit. B. producing output where MR = MC and charging a price along the demand curve. C. setting output at MR = MC and setting price at the demand curve's highest point. D. producing maximum output where price is equal to its marginal cost.

B

The percentage of workers belonging to a union is higher in the A. 45-64 age range. B. 25-45 age range. C. 40 -65 age range. D. 30-50 age range.

A. 45-64 age range.

Which of the following denotes the typical shape of the monopolist's total cost curve? A. total costs decrease and become flatter as output rises B. total costs rise and grow steeper as output rises C. higher output levels create the typical downward sloping cost curve D. total costs are typically constant and are shown by a straight horizontal line

B

Under perfect competition, any profit-maximizing producer faces a market price equal to its A. average costs B. marginal costs C. total costs D. variable costs

B

Firms operating in a market situation that creates ___________________, sell their product in a market with other firms who produce identical or extremely similar products. A. a perfect monopoly B. perfect competition C. an oligopoly D. a free-market

B

If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3,90 per unit, it will produce and sell the sixth unit if its marginal cost is A. $3.90 or less B. $3.40 or less C. $3.50 or less D. $4.00 or less

B

If a firm's revenues do not cover its average variable costs, then that firm has reached its _________________ . A. price taking point B. shutdown point C. marginal point D. opportunity margin

B

If a monopoly or a monopolistic competitor raises their prices, then A. decline in quantity demanded will be larger for the monopoly. B. decline in quantity demanded will be larger for the monopolistic competitor. C. the quantity demanded for the monopoly product falls to zero. D. the quantity demanded for the monopolistic competitor will fall to zero.

B

If a perfectly competitive firm raises its price, the quantity demanded of its product _____________. A. diminishes temporarily in the short run B. falls to zero C. stays the same D. falls below marginal cost

B

If a perfectly competitive market involves many firms selling identical products, then, in the face of such competition, A. each of these firms must act as a price-maker. B. each of these firms must act as a price-taker. C. collusion amongst them will most often result. D. demand curves can become kinked in appearance.

B

If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is A. they will both increase market share. B. they will simply neutralize one another's efforts. C. they will both lose market share. D. they will both improve their industrial position.

B

If it was possible for one company to gain ownership control all of the uranium processing plants in the US, then A. they will strive to reach efficiencies only they know how to make. B. that firm could set up barriers to entry to discourage competition. C. government will deregulate to ensure the company's monopoly. D. the factors of market demand and supply will set the price.

B

In a perfectly competitive market, each firm produces at a quantity where price is set A. equal to marginal cost, in the short run. B. equal to marginal cost, both in the short run and in the long run. C. equal to average cost, in the long run. D. equal to average cost, both in the short run and in the long run.

B

37. Given the data provided in the table below, what will the marginal revenue equal for production at quantity (Q) level 4? A. $20.00 B. $15.00 C. $5.00 D. $1.00

C

42. The following table shows a monopolist's demand curve and cost information for the production of its good. What quantity will it produce? A. 10 B. 20 C. 30 D. 40

C

In the United States, the number of unionized government jobs has __________________. A. increased dramatically B. increased modestly C. modestly declined D. dramatically declined

B. increased modestly

In the business world, a _________________ is recognized as a legally acceptable way for any business to keep knowledge of its particular methods of production from being known by competing firms. A. patent B. monopoly C. trade secret D. trademark

C

Which of the following will present the least amount of concern to a firm that has a monopoly over a particular industry? A. whether consumers will purchase its product B. whether consumers will spend on different products C. the competitive actions of other business firms D. barriers to entry and competitors' patent protection

C

In order to produce 100 pairs of oven gloves, Marcia incurs an average total cost of $2.50 per pair. Marcia's marginal cost is constant at $10.00 for every pair of oven gloves produced. The total cost to produce 50 pairs of oven gloves is A. $250.00 B. $500.00 C. $300.00 D. $200.00

D

In the framework of monopolistic competition, advertising works because it causes A. the steeper perceived demand curve to become flatter. B. perceived demand curve to shift to the left. C. perceived demand curve to shift to the right. D. a steeper perceived demand curve, as well as c above.

D

In the framework of monopolistic competition, the way advertising works can be perceived as A. causing a firm's perceived demand curve to become more elastic. B. causing a firm's perceived demand curve to become more inelastic. C. causing demand for the firm's product to increase. D. causing both b and c to occur.

D

A _____________ is an organization of workers that negotiates with employers as a group over wages and working conditions. A. affirmative union B. collective union C. labor union D. cooperative union

C. labor union

The costs that immigrants impose on governments arise mainly in terms of _________, which are primarily the responsibilities of the _________ government(s). A. administration, state and local B. administration, federal C. public schools and healthcare, state and local D. public schools and healthcare, federal

C. public schools and healthcare, state and local

A successful advertising campaign may allow competing monopolists to A. sell a greater quantity. B. charge a higher price. C. increase its profits. D. do all of the above.

D

The existence of labor unions forces employers to deal with workers ________________________ . A. individually, rather than as a collective B. cooperatively, rather than uncooperatively C. equitably, rather than inequitably D. collectively, rather than as individuals

D. collectively, rather than as individuals

If immigration consists of mainly high-skilled workers, then a(n) ________ in immigration will ________ the wages of high-skilled workers. A. increase, increase B. increase, not affect C. decrease, decrease D. decrease, increase

D. decrease, increase

If the price that a firm charges is higher than its ________________ cost of production for that quantity produced, then the firm will earn profits. A. marginal B. variable C. average D. fixed

C

In monopolistic competition, the end result of entry and exist is that firms end up with a price that lies A. on the upward-sloping portion of the average cost curve. B. at the very bottom of the AC curve. C. on the downward-sloping portion of the average cost curve. D. at the very top of the AC curve.

C

The largest cattle rancher in a given region will be unable to have a __________ when sufficient numbers of smaller cattle ranchers provide sources of competition. A. oligopoly B. patent C. monopoly D. monopolistic competition

C

Government ______________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for ______________ . A. patent; a limited time B. trademark; an unlimited time C. copyright; a limited time D. trade secret; an unlimited time

A

A natural monopoly occurs when the quantity demanded is ________ the minimum quantity it takes to be at the bottom of the long-run average cost curve. A. greater than B. less than C. equal to D. a or c above

B

As the name monopolistic competition implies, a firm's decisions in this setting will in certain ways resemble ______________ and in other ways resemble________________ . A. monopoly; imperfect competition B. monopoly; perfect competition C. imperfect competition; perfect competition D. imperfect competition; oligopoly

B

Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it? A. prices that can be charged B. natural monopoly C. conditions of entry in a certain industry D. quantities that can be produced

B

Economic profit can be derived from calculating total revenues minus all of the firm's costs, A. excluding its opportunity costs. B. including its opportunity costs. C. including its marginal revenue. D. excluding its marginal revenue.

B

In order to produce 100 oatmeal cookies, GoodieCookieCo incurs an average total cost of $0.25 per cookie. The company's marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is A. $25 B. $20 C. $50 D. $60

B

In the ________, the perfectly competitive firm will react to losses by __________________________ . A. short run; reducing production or shutting down B. long run; reducing production or shutting down C. short run; increasing physical inputs D. long run; increasing capital inputs

B

In the event that Only1Corp. obtains control of all the natural gas producers in the US, it would most likely A. have a patent giving it exclusive legal rights to make, use, and sell for a limited time. B. raise prices, cut production, and realize positive economic profits. C. have legal protection to prevent copying its methods of production for commercial use. D. acquire rights for its investors to produce and sell their product.

B

34. Refer to the diagram above. In this instance, the range of production possibilities at point d, A. is a steeper slope reflecting increasing profits due to diminishing costs. B. is a steeper slope reflecting a lower price. C. is a steeper slope reflecting a return to losses due to diminishing returns. D. is a steeper slope reflecting higher total revenue.

C

By 2007, US market deregulation has proven to be most toxic to the overall health of the US economy in the ________________________ . A. telecommunications sector B. postal services sector C. banking sector D. nuclear power sector

C

For a monopolistic firm, the demand for its product is A. unitary elastic B. completely elastic C. completely inelastic D. neither b or c

C

How can parties who find themselves in a prisoner's dilemma situation avoid the undesired outcome and cooperate with each other? A. one oligopoly can physically beat up another oligopoly B. by seeking alternatives to create pressure for members to keep output up and prices up C. find effective ways to penalize firms who do not cooperate D. sign legally enforceable contracts setting out their mutual agreement to act like a monopoly

C

If a firm holds a pure monopoly in the market and is able to sell 4 units of output at $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit if its marginal cost is A. $1.75 or less B. $2.00 or less C. $0.75 or less D. $1.00 or less

C

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to A. match price increases, but not price cuts. B. stand at opposite ends of the competition spectrum. C. match price cuts, but not price increases. D. stand at the high point of the competition spectrum.

C

The perceived demand for a monopolistic competitor A. is steep. B. is flat. C. takes competitors into account. D. disregards competitors.

C

Since 1960, the earnings gap between men and women in the U.S. labor market has A. steadily risen. B. been completely eliminated. C. continued to narrow. D. increased throughout the 1970s.

C. continued to narrow.

Say the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3 year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically A. begin to fire its older union workers. B. replace union workers with non-union workers. C. curtail expansion of labor as a trade-off. D. replace union workers with foreign workers.

C. curtail expansion of labor as a trade-off.

54. Refer to the table below. In this instance, confirmation that this firm is operating in a perfectly competitive market can readily be ascertained by the fact that its A. marginal cost is increasing. B. total cost is increasing. C. economic profits are zero. D. marginal revenue is constant.

D

In the ________, the perfectly competitive firm will react to profits by __________________________ . A. short run; increasing quality of products B. long run; tailoring their quality controls C. short run; reducing its labor inputs D. long run; increasing its production

D

Labor unions can: A. be a primary line of defense against suppressed wage levels. B. be controversial in a for-profit market driven economy. C. bring better economic gains for their memberships. D. protect workers' pensions and all of the above.

D. protect workers' pensions and all of the above.

If the price that a firm charges is lower than its ____________ of production, the firm will suffer losses. A. average cost B. marginal cost C. fixed cost D. variable cost

A

In the United States, a pharmaceutical company's exclusive patent rights last for A. 20 years. B. 25 years. C. 10 years. D. 70 years.

A

__________________ law implies ownership over an idea or concept or image A. Intellectual property B. Copyright C. Patent D. Trademark

A

Which of the following is most unlikely to present a barrier to entry into a market? A. market forces B. patent laws C. technological advantages D. deregulation

D

36. Given the data provided in the table below, the total revenue (TR) for production at quantity (Q) level 4 equals A. zero B. $1.00 C. $15.00 D. $20.00

D

39. Given the data provided in the table below, what will the amount of profit be for production at quantity (Q) level 7? A. -$10.00 B. zero C. -$5.00 D. $1.00

A

43. The table below shows a monopolist's demand curve and the cost information for the production of its good. What will their profits equal? A. $1,200 B. $1,600 C. $1,000 D. $600

A

47. The following table shows a monopolist's demand curve and cost information for the production of its good. What price will it charge? A. $25 B. $30 C. $20 D. $40

A

59. The following figure ???shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. After maximizing profits, what do the firm's costs equal? A. the area of rectangle ABGH B. the area of rectangle BDEG C. the area of rectangle ACFH D. the area of rectangle ADEH

A

68. Sam owns an antique store in Boston. Many of his competitors left the market, causing his perceived demand curve to change. The following 2 tables show his old and new perceived demand curves. Assume Sam can only choose from the quantities of output given in the table. By how much will the quantity that he sells change as a result of his competitors leaving the market? A. it will stay the same B. increase by 10 C. decrease by 10 D. increase by 5

A

70. A monopolistic competitor has the following information about cost and demand. What will the firm's profits equal in the short run? A. 0 B. $91 C. $102 D. $228

A

71. A monopolistic competitor has the following information on cost and demand. What will the firm's profits equal in the long run? A. $0 B. $91 C. $102 D. $228

A

75. A monopolistic competitor has the following information about cost and demand. What will this firm's profits equal in the long run? A. -$55 B. $0 C. $250 D. $280

A

A __________________ exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve. A. natural monopoly B. monopoly C. oligopoly D. monopolistic competition

A

A firm that holds a monopoly position in the market place is A. a price maker B. a price taker C. monopolistically competitive D. subject to infinite market forces

A

A monopolistically competitive firm may earn abnormally high profits in the A. short term, but the process of entry will drive those profits to zero in the long run. B. long term, but the process of entry will drive those profits to zero in the short run. C. short run, but after entry occurs, the long term perceived demand curve shifts to the right. D. long run, but after entry occurs, the short term perceived demand curve shifts to the right.

A

If a monopolist increases quantity by one unit, but sells the increased output at a slightly lower price, A. marginal revenue is affected by adding one additional unit sold at the new price. B. all the previous units, which used to sell at a higher price, now sell for more. C. the marginal revenue of selling a unit is more than the price of the unit. D. because of higher output the marginal revenue curve is above the demand curve

A

If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to A. divide up the monopoly level of profit amongst themselves. B. hold down output in the short-run. C. charge a higher price in the short-run. D. both b and c above are correct.

A

In a monopolistically competitive market, the rule for maximizing profit is to set MR = MC, which means A. price is higher than marginal revenue. B. price is equal to marginal revenue. C. price is equal to marginal cost. D. price is lower than marginal revenue.

A

In the framework of an oligopoly, what strategy can work like a silent form of cooperation? A. always match other cartel firms' price cuts, but don't match price increases B. always match other cartel firms' price increases, but don't match price cuts C. immediately match price increases D. legally enforceable agreements

A

Monopolistic competitors can make a _____________ in the short-run, but in the long run, ______________ will drive these firms toward _______________________ . A. profit or loss; entry and exit; a zero-profit outcome B. loss; exit; losses on their earnings C. profit or loss; exit; economic profits D. profit; entry; a price that lies at the very bottom of the AC curve

A

Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition _________________ . A. barriers to entry; to a few oligopoly firms B. barriers to entry; to a natural monopoly C. deregulation; requiring new patent law D. deregulation; requiring new copyright law

A

When exit occurs in a monopolistically competitive industry the A. perceived demand and marginal revenue curves will shift to the right. B. perceived demand and marginal revenue curves will shift to the left. C. perceived demand curve will shift to the left. D. marginal revenue curve will shift to the left.

A

Which of the following would most likely create the setting for an oligopoly? A. government grants Alex, Trent, and Alyse each a patent for their respective molybdenum based electric car batteries B. market demand is two or more times less than quantity needed to produce at the minimum of the AC curve C. market demand is two or more times more than quantity needed to produce at the minimum of the MC curve D. insurmountable technological difficulty associated with producing similar products acts as an effective barrier to entry

A

Which of the following industries is the least likely to employ a unionized labor force? A. finance, insurance and real estate B. transportation and public utilities C. government D. precision, production, and repair

A. finance, insurance and real estate

Any government policy that provides __________________ and _________________ deserves to be looked at twice, or even three times. A. gains to those with higher incomes; imposes costs on those with lower incomes B. gains to those with lower incomes; imposes costs on those with higher incomes C. public schooling; welfare benefits D. local tax revenue; state tax revenue

A. gains to those with higher incomes; imposes costs on those with lower incomes

The presence of organized labor in the U.S. labor market creates a situation that resembles a A. government acting as a negotiator between workers and employers. B. union official acting like lawyers negotiating legal agreements. C. for profit-firm acting cooperatively to reduce unequal wealth distribution. D. union acting as a monopoly in selling labor to firms.

A. government acting as a negotiator between workers and employers.

There is little evidence that countries with high union membership _______________________________, and also very little evidence that the reduction in U.S. union membership over time has brought ___________________ for the U.S. economy as a whole. A. tend to suffer economic damage as a result; broad benefits or costs B. have economically benefited; economics benefits C. have broader benefits as a result; economic damage D. tend to enjoy economic benefits as a result; harmful economic costs

A. tend to suffer economic damage as a result; broad benefits or costs

Factors that contributed to the current level of the earnings gap in the U.S. labor market between black and white workers include: A. the combination of changes in law and changes in social attitudes B. changes in production techniques made white workers unproductive C. a large decline in the average education levels for white workers D. a vast increase in the number of well-educated black workers and a

A. the combination of changes in law and changes in social attitudes

33. Refer to the diagram above. In this instance, at the range of output represented at point c, A. the shutdown point has been reached. B. profits will be maximized. C. physical input levels have been reduced. D. capital input levels have been reduced.

B

61. The following figure ??shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. After maximizing profits, what do the firm's profit's equal? A. the area of rectangle ABGH B. the area of rectangle BDEG C. the area of rectangle BCFG D. the area of rectangle ADEH

B

62. The following graph ???shows the demand curve for a good and the long run average cost curve for a typical firm in this market. If the government does not intervene in the market, then A. there will be many firms in this market, all of whom will take the market price as given and produce where price equals marginal cost B. there will only be 1 firm in this market, and they will produce where marginal revenue equals marginal cost C. there will only be 1 firm in this market, and they will take the price as given and produce where price equals marginal cost D. no firms will enter this market

B

62. The table below shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what price will they charge? A. $800 B. $600 C. $400 D. $200

B

66. Bob competes in a monopolistically competitive market. Suppose some new firms enter the market, causing his perceived demand curve to shift. The following tables show his demand curves, before and after the change, and his cost information. Assume that Bob can only choose from the quantities of output given in the table. By how much will his profit change after these new firms enter the market? A. his profits will not change B. decrease by $9,000 C. increase by $11,000 D. decrease by $11,000

B

Once I'MaPharmaCo. has received confirmation of the registration for its latest drug patent application, it will have created a monopoly for that product by restricting A. demand for the product. B. entry into the market. C. amount of product advertising. D. the number of product compliments.

B

The US government has registered ___________________ on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily __________________ . A. 200,00 patents; license for use B. 800,000 trademarks; identify the source of goods C. 1 million copyright licenses; identify the authors of creative works D. 200,000 trade secrets; create a natural monopoly

B

The marginal revenue curve for a monopolist ____________________ the market demand curve. A. always rises above B. always lies beneath C. always runs parallel D. always is the same

B

The single most common form of competition in the U.S. is A. perfect competition among firms with differentiated products. B. monopolistic competition among firms with differentiated products. C. oligopolistic competition in a certain market with similar products. D. perfect competition because it displays product and allocative efficiencies.

B

The two primary factors determining monopoly market power are the firm's A. revenues and size of its customer base B. demand curve and its cost structure C. variable cost curve and its fixed cost structure D. demand curve and level of wealth within its market

B

What qualities would ideally suit a monopolistic firm with regard to barriers to entry? A. a few impediments to limit new firms from operating and expanding within the market B. sufficient strength to prevent or discourage potential competitors from entering the market C. government rules on prices, quantities, or conditions of entry in an industry D. government regulations that provide no barriers to entry, exit, or competition

B

When entry occurs in a monopolistically competitive industry, A. the perceived demand and marginal revenue curves for each firm will shift to the right. B. the perceived demand and marginal revenue curves for each firm will shift to the left. C. the perceived demand curve for each firm will shift to the right. D. the marginal revenue curves for each firm will shift to the right.

B

Which of the following is a question economists have struggled to address with only partial success? A. Whether monopolistic competition provides optimal productive or allocative efficiency? B. Whether a market-oriented economy produces the optimal amount of variety? C. Does a market-orientated economy provide productive or allocative efficiency? D. Does a monopolistically competitive industry displays allocative efficiency in the short run?

B

Which of the following is most likely to be a monopoly? A. local fast-food restaurant B. local electricity distributor C. local bathroom fixtures shop D. local television broadcaster

B

_____________ and __________________ refer to the quantity and price at a point in time. A. Monopoly; productive efficiency B. Productive; allocative efficiency C. Monopoly; allocative efficiency D. Profit; maximization

B

__________________ involves active efforts to improve the job opportunities or outcomes of minority groups or women. A. Meritorious action B. Affirmative action C. Anti-discriminative action D. Aligned action

B. Affirmative action

What Act was passed to allow American workers to opt out of the union in their workplace? A. Labor Relations Act of 1947 B. Taft-Hartley Act of 1947 C. National Labor-Management Relations Act of 1935 D. National Workers' Rights Act of 1940

B. Taft-Hartley Act of 1947

Of the many available policies to reduce discrimination by race and gender in the U.S. labor market, the most controversial is likely to be A. laws prohibiting discrimination B. affirmative action goals and quotas C. increased access to child care D. improved educational opportunities

B. affirmative action goals and quotas

Members of labor unions are able to use their ________________ to achieve better economic outcomes. A. cooperative nature B. bargaining power C. secret ballot votes D. excess supply of labor

B. bargaining power

. In recent years, the U.S. labor market has experienced a __________ in the earnings gap between men and women. One of the main factors behind this is ____________________ . A. big decline; men have steadily been less productive and their wages have fallen B. decline; women's' career focus and rewards gained with top-level job expertise C. increase; women are getting married and having children earlier in life D. big increase; an increase in gender-based discrimination in labor markets

B. decline; women's' career focus and rewards gained with top-level job expertise

Once the U.S. government opened its domestic markets to international trade, the competition from imported cars, steel, and other products caused demand for similar U.S. goods to A. continually increase leading to an overall increase in union membership. B. fall, leading to lower output, fewer workers, and an overall decline in union membership. C. decline, causing workers to call upon governments to pass indexed wage protection laws. D. rise, but laws made it difficult for new workers to become union members.

B. fall, leading to lower output, fewer workers, and an overall decline in union membership.

The earnings gap in the U.S. labor market between black and white workers __________ in the 1960s and 1970s, but, since 1980, the gap _______________. A. rose substantially; has not changed much B. fell substantially; is pretty well unchanged C. rose substantially, has declined substantially D. fell substantially, has substantially increased

B. fell substantially; is pretty well unchanged

There is sufficient evidence showing that union workers in the manufacturing sector generally A. tend to hold those jobs for less time than non-union workers. B. have higher productivity than non-union workers. C. have fewer years of experience than non-union workers, D. have lower productivity than non-union workers

B. have higher productivity than non-union workers.

The Taft-Hartley Act made the legal climate ____________________ , and union membership levels ___________________ . A. more encouraging to women seeking to unionize; increased B. less encouraging to union movements; soon started declining C. friendlier to blacks seeking to form unions; increased sharply D. less friendly for firefighters wanting to unionize; stagnated.

B. less encouraging to union movements; soon started declining

With regard to labor unions, which of the following is an accurate statement? A. percentage of members is higher for women than men B. membership is lower for agriculture or service-oriented jobs C. membership is lower in government and manufacturing D. membership is higher for blacks or Hispanics than for whites

B. membership is lower for agriculture or service-oriented jobs

In the United States, the share of wage and salary for workers who belong to unions A. declined sharply in the 1930s and 1940s. B. rose sharply in the 1930s and 1940s. C. rose sharply in the 1950s and 1960s. D. declined sharply in the 1940s and 1950s.

B. rose sharply in the 1930s and 1940s.

If U.S. immigration consists of mainly low-skilled workers, then an increase in immigration __________ the wages of low-skilled workers. A. will increase B. will reduce C. may increase or reduce D. will not affect

B. will reduce

If oligopolists compete hard against each other, A. they end up acting very much like imperfect competitors. B. costs for all are driven up. C. zero profits result for all. D. they end up acting very much like monopolistic competitors.

C

61. The following table shows the demand curve and cost information for a firm that is a monopoly. What quantity should they produce to maximize their profits? A. 200 units B. 400 units C. 600 units D. 800 units

C

63. The following table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what will their revenue equal? A. $16,000 B. $32,000 C. $54,000 D. $56,000

C

69. A monopolistic competitor has the following information about cost and demand. If this industry was perfectly competitive, what price would the good sell for? A. $15 B. $19 C. $21 D. $23

C

72. A monopolistic competitor has the following information about cost and demand. If this industry was perfectly competitive, what price would the good sell for? A. $8 B. $9 C. $10 D. $11

C

A monopolistically competitive industry does not display ____________________ in either the short-run, when firms are making _______________, nor in the long-run, when firms are earning ________________ . A. allocative efficiency; profits and losses; negative profits B. productive efficiency; profits and losses; zero profits C. productive and allocative efficiency; profits and losses; zero profits D. productive and allocative efficiency; profits and losses; negative profits

C

A perfectly competitive industry is a A. realistic extreme. B. hypothetical assumption. C. hypothetical extreme. D. realistic assumption

C

If one firm operating in an oligopoly raises its price and other firms do not do so, A. the sales of the firm with the higher price will decline slightly. B. the egos of all the top executives will eventually lead to cooperation at that higher price. C. the sales of the firm that increased its price will decline sharply. D. the firm with the increased price will have its higher profits sustained through cooperation.

C

Perfect competition displays _____________________ because the social benefits of additional production, as measured by the price that people are willing to pay, are in balance with the ____________ to society of that production. A. allocative efficiency; total costs B. economic efficiency; total revenues C. allocative efficiency; marginal costs D. economic efficiency; marginal revenues

C

The demand curve perceived by a perfectly competitive firm A. shows that such a firm is a price-maker B. shows economies of scale over a large range of output C. is horizontal D. all of the above

C

The form of legal protection intended to prevent reproduction of original works is referred to as ______________ law. A. patent B. trademark C. copyright D. trade secret

C

The use of sharp, temporary price cuts as a form of _________________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers. A. natural monopoly B. monopolistic competition C. predatory pricing D. oligopolistic competition

C

Through the process of exit, monopolistically competitive firms remaining in the market A. are no longer earning zero economic profits. B. will each have ongoing negative earnings. C. are no longer earning losses. D. have positive earnings.

C

When J.K. Rowling exerts copyright ownership of her literary works, she creates a monopoly by restricting A. the number of inventors. B. unit production costs. C. entry into the market. D. demand for the product.

C

When P > MC in a monopolistically competitive market, that industry will most likely produce ______________________ than would be found in a perfectly competitive industry benefits to society of providing additional quantity as measured by the price that people are willing to pay exceeds the marginal costs to society of producing those units. A. a higher quantity of a good and charge a lower price B. the price that people are willing to pay is lower C. a lower quantity of a good and charge a higher price D. the price people are willing to pay is not more

C

When a firm pursues a predatory pricing strategy, it does so A. to hire more staff to lower unemployment. B. to increase supply to benefit consumers. C. to maximize profits in the long run. D. to discourage short run competition.

C

Which one of the following is the most accurate description of a monopolist? A. a sole producer of a narrowly defined product class, such as brown, Grade A eggs produced in Eagle County, Colorado B. a firm that is very large relative to all its competitors within a narrow product class C. a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry D. a large, multinational firm that produces a single product in a narrow product class

C

If an economist were to disregard unionized government employees, then current U.S. labor market statistics would show that A. 10% of the workers employed by private firms work for a union. B. 98% of the workers employed by private firms aren't unionized. C. 8% of the workers employed by private firms work for a union. D. 80% of the workers employed by private firms aren't unionized.

C. 8% of the workers employed by private firms work for a union.

Union members earn ______________ than non-union members, even after adjusting for factors such as _____________________________ . A. about 10% more; racial discrimination and immigration. B. about the same; union dues and cost of lawyers for collective bargaining. C. about 20% more; years of work experience and education level. D. about 30% more; healthcare and retirement benefits.

C. about 20% more; years of work experience and education level.

Union membership has ____________ in the United States because of _________________________ . A. risen; the shift from service to manufacturing industries B. risen; increased global trade from U.S. manufacturers C. fallen; laws enacted making it more difficult to unionize D. fallen; laws making workplace protection more difficult

C. fallen; laws enacted making it more difficult to unionize

The earnings gap in the U.S. labor market between black and white workers ___________________. A. was completely eliminated by the end of the 1960s B. has not diminished at all since 1960 C. has diminished since 1960, but a gap still remains D. existed in the 1960s but was reversed throughout the 1970s

C. has diminished since 1960, but a gap still remains

In the U.S. manufacturing sector, unionized jobs have _________________ in recent years. A. increased modestly B. have trended up C. have trended down D. declined dramatically

C. have trended down

Measured in absolute numbers, the level of immigration during the 1990s into the United States was _________ compared with the levels of previous decades. When considered as a percentage of the population at the time, the level of immigration into the United States during the 1990s was ________ than the levels experienced during the earlier decades of the twentieth century. A. lower, higher B. lower, lower C. higher, lower D. higher, higher

C. higher, lower

The study of unions and their economic effects needs to focus on ___________________, not on _____________ . A. economic benefits; economic harms B. economic harms; economic benefits C. specific situations; generalities D. generalities; specific situations

C. specific situations; generalities

If a for-profit firm that has paid out record bonuses to its executive every year while underfunding contributions to unionized workers' pensions required under the collective agreement then attempts to reduce workers' pension entitlements, the union members will most likely A. enter into collective bargaining. B. be unable to defend against this action. C. take defensive strike action. D. receive higher wages instead.

C. take defensive strike action.

Which of the following arguments would most likely be presented by a critic of labor unions? A. unions oppose suppression of wages by profit-seeking firms B. unions have a tendency to gain as much as possible in the long-term C. unions can prohibit economic growth if new technology is blocked D. unions have a higher percentage of women members than men

C. unions can prohibit economic growth if new technology is blocked

31. Refer to the diagram above. Which of the following explains the slope of the total revenue curve illustrated in this graph? A. total revenue shown as a straight line sloping up indicates a perfectly competitive firm B. the slope of the total revenue curve is determined by the price of the goods produced C. at higher levels of output, diminishing returns will cause total cost to slope downward steeply D. the slope of the total revenue curve is explained by both a and b above.

D

41. Refer to the table below. If the information pertains to the demand curve and the long run average cost curve for an electric company that is a natural monopoly, then what quantity will be produced in this market? A. 300 B. 400 C. 100 D. 200

D

44. The table below shows a monopolist's demand curve and cost information for the production of its good. What quantity will it produce? A. 1,400 B. 1,300 C. 1,100 D. 1,000

D

58. The figure below??? shows the demand curve and the long run average cost curve for an electric company. This market is a natural monopoly because A. the long run average cost curve is U-shaped B. when producing large quantities, the long run average cost is greater than demand C. when producing small quantities, the demand is higher than long run average cost D. the demand curve intersects the long run average cost curve at a point where the long run average cost curve is downward sloping

D

60. The following figure??? shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. After maximizing profits, what does the firm's revenue equal? A. the area of rectangle ABGH B. the area of rectangle BDEG C. the area of rectangle BCFG D. the area of rectangle ADEH

D

65. Mary competes in a monopolistically competitive market. Suddenly, 5 new firms enter the market, causing her perceived demand curve to shift. The following tables show her original and new demand curves and her cost information. Assume that Mary can only choose from the quantities of output given in the table. By how much will the quantity that she produces change after the new firms enter the market? A. increase by 5 B. decrease by 5 C. increase by 10 D. decrease by 10

D

If monopolists are able to produce fewer goods and sell them at a higher price than they could under perfect competition, the result will be A. elimination of barriers to entry B. irregularly high unsustainable profits. C. government deregulation. D. abnormally high sustained profits.

D

If the North American newsprint paper market has barriers to entry, then A. abnormally high profits will attract the entry of new firms. B. the entry of new firms will eventually cause price to decline. C. surviving firms earn only a normal level of profit in the long run. D. entry will be blocked even if firms are earning high profits.

D

Intellectual property law is a body of law that includes A. the right of inventors to produce their inventions B. the right of inventors to sell their inventions C. trademark, patent and trade secret legislation D. copyright legislation, as well as all of the above

D

The US laws dealing with original works of authorship allow the US Copyright Office to enforce protection for all but one of the following. Which one is it? A. contemporary sculptures B. contemporary paintings C. pantomimic works D. ancient Bible texts

D

The desire of businesses to __________________________, so that they can raise the prices that they charge and earn higher profits, has been well-understood by economists for a long time. A. compete with each other B. engage in free market activities C. maximize profits for social benefit D. avoid competing with each other

D

The long-term result of entry and exit in a perfectly competitive market is that all firms end up selling at the price level determined by the lowest point on the A. total cost curve. B. average variable cost curve. C. total marginal cost curve D. average cost curve.

D

The slope of the demand curve for a monopoly firm is A. horizontal, parallel to the x-axis B. vertical, parallel to the y-axis C. upward sloping D. downward sloping

D

The total revenue curve for a monopolist will A. start high, rise, and then decline. B. start low, decline, and then rise. C. start high, decline, and then rise. D. start low, rise, and then decline.

D

The typical pattern of costs for a monopoly can be analyzed by using: I) total cost II) fixed cost III) variable cost IV) marginal cost V) average cost VI) average variable cost A. I, II, and III B. I, III and IV C. I, II, III, IV, and VI D. all of the above

D

The typical pattern of costs for a perfectly competitive firm can be analyzed by using: I) total cost II) fixed cost III) variable cost IV) marginal cost V) average cost VI) average variable cost A. I, II, and III B. I, III and IV C. I, II, III, IV, and VI D. all of the above

D

When a monopolist increases sales by one unit, A. it gains some marginal revenue from selling that extra unit. B. more low priced sales cause negative marginal revenues. C. every other unit must now be sold at a lower price. D. it loses some marginal revenue and all of the above.

D

When a natural monopoly exists in a given industry, the per-unit costs of production will be A. lowest when there are a large number of producers in the industry. B. lower for the smaller firms than for larger firms. C. minimized at the output that maximizes the industry's profitability. D. lowest when a single firm generates the entire output of the industry.

D

When entry occurs in a monopolistically competitive industry, A. marginal costs to society exceed the price people are willing to pay. B. price is equal to marginal revenue gained by society. C. the marginal revenue curve will shift to the left. D. a smaller quantity will be demanded at any given price.

D

Which of the following represents a difference in the process by which a monopolistic competitor and a monopolist make their respective decisions about quantity and price? A. only the monopolist competitor faces a downward-sloping demand curve B. the monopolist's perceived demand curve is market demand C. the monopolist competitor's perceived demand curve is market demand D. a monopolist need not fear entry and also selection b above

D

Discriminatory impulses in the labor market can emerge at a number of levels: A. among managers B. among workers C. among customers D. all of the above

D. all of the above

Of all the available policies to reduce discrimination by race and gender, the most costly is likely to be: A. affirmative action outreach B. affirmative action goals and quotas C. laws prohibiting discrimination D. improved educational opportunities

D. improved educational opportunities

From a competitive firms' point of view, the key question regarding the higher wages paid to union workers is whether the higher wage level A. is matched by non-union producers. B. can be passed on to its costumers. C. leads to workers with more experience. D. is matched with higher productivity.

D. is matched with higher productivity.

Unions can be perceived as being economically harmful when they A. strike infrequently B. successfully negotiate higher wages C. support modernization and new technology D. none of the above

D. none of the above

In order to provide its workforce with an alternative to forming a union, the U.S. government passed laws about work conditions, namely, A. minimum wage and employment insurance. B. regulation of workers' pensions. C. paid parental leave for workers. D. overtime and all of the above.

D. overtime and all of the above.

Which of the following is most likely to have a large union membership that experiences little import competition? A. telemarketing B. lawyers in the legal services sector C. the real estate industry D. police services

D. police services

In the Unites States, worker membership in labor unions has been A. steadily growing for 50 years. B. steadily growing in the last decade. C. steadily growing due to immigration. D. steadily declining for 50 years.

D. steadily declining for 50 years.

If unions help workers secure pension benefits, so that those workers are less dependent on government social assistance after their retirement, then A. the for-profit unionized industries will be less productive. B. the for-profit unionized industries will be harmed. C. the union is economically harmful. D. the union is economically beneficial.

D. the union is economically beneficial.

Discrimination in labor markets arises if _________________________, as measured by education, receive different pay because of their _______________________ . A. workers with different skill levels; race or gender B. workers with no experience; race or marital status C. workers with work experience; race or marital status D. workers with the same skill levels; race or gender

D. workers with the same skill levels; race or gender

32. Refer to the diagram above. In this instance, at the range of output represented at point b, A. total costs exceed total revenues. B. total revenues exceed total costs. C. the firm is earning profits. D. the firm should shut-down.

A

______________________ refers to the additional revenue gained from selling one more unit. A. Marginal revenue B. Total revenue C. Economic profit D. Accounting profit

A

If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then, A. the firm's perceived demand will shift to the left. B. the firm should keep expanding production. C. each marginal unit adds profit by bringing in less revenue than its cost. D. the firm is now earning zero for profit.

B

In economic terms, a practical approach to maximizing profits requires an examination of how changes in production affect ________________ and ________________ . A. total revenue; total cost B. marginal revenue; marginal cost C. total revenue; marginal cost D. marginal revenue; total cost

B

If a monopolistic competitor raises its price, it _________ customers than a perfectly competitive firm, but ________________ customers compared to the number that a monopoly that raised its prices would. A. will lose more; it will lose as many B. will lose more; it will lose more C. will lose fewer; it will lose more D. will lose fewer; it will lose as many

C

40. Given the data provided in the table below, what will the fixed costs equal for production at quantity (Q) level 4? A. $35.00 B. $4.00 C. $36.00 D. $9.00

D

43. Refer to the diagram above. Based on the information illustrated in this graph, which of the following is an accurate statement? A. MC is initially downward sloping in the region of increasing MR at low output levels B. As production increases, marginal revenue always increase so profits rise C. as production decreases, marginal revenue will increase so profits will rise D. a profit-seeking firm should continue to expand production as long as MR is less than MC

A

55. Refer to the table below. In this instance, expansion of output A. causes input prices to rise as demand for inputs increases. B. leaves input prices constant as demand for inputs increases. C. causes diseconomies of scale to occur. D. occurs because of increasing returns to scale.

A

A _________ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price. A. prisoner's dilemma B. cartel C. game theory D. duopoly

A

I'maGoldMiner has benefited from a record rise in gold prices in the global commodities market. While the price of its output is highly influenced by market speculation, if it wants to increase production to take advantage of the current profit-maximizing opportunity, the company A. must accept market price for its physical capital inputs. B. must reduce what it pays for inputs that make up its costs of production. C. must reduce production to encourage speculators to drive gold prices higher. D. must alter the price of its labor inputs to maximize profits.

A

If a competitive firm experiences a shift in costs of production that decreases marginal costs at all levels of output, A. expanding output levels at any given price will be profitable. B. producing less at any market price will off-set marginal cost . C. the firm's marginal cost curve will shift to the left. D. the firm's demand curve will also shift to the left.

A

If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its A. allocative efficiency B. productive efficiency C. utility-maximizing efficiency D. minimum price efficiency

A

If a perfectly competitive firm is a price taker, then A. pressure from competing firms will force acceptance of the prevailing market price. B. it must be a relatively small player compared to its competitors in the overall market. C. it can increase or decrease its output without affecting overall quantity supplied in the market. D. quality differences will be very perceptible and will play a major role in purchasers' decisions.

A

In Sam's greenhouse operation, labor is the only short term variable input. After completing a cost analysis, if the marginal product of labor is the same for each unit of labor, this will imply that A. the average product of labor is always equal to the marginal product of labor. B. the average product of labor is always greater that the marginal product of labor. C. the average product of labor is always less than the marginal product of labor. D. as more labor inputs are used, the average product of labor inputs will fall.

A

In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice? A. what quantity to produce B. what price to charge C. what quantity of labor is needed D. what quality to produce

A

In the competitive market for figure skate blades, manufacturers offer an array of products that are A. distinctly different in a particular way. B. distinctly similar in a particular way. C. virtually identical on the competition spectrum. D. at opposite ends of the competition spectrum.

A

Oligopoly firms acting individually may seek to gain profits ___________________________ . A. by expanding levels of output and cutting prices B. by selling products that are distinctive in some way C. by having a mini-monopoly on a particular brand name D. by having a mini-monopoly or through tough competition

A

The demand curve as perceived by a perfectly competitive firm is __________ . A. flat B. downward sloping C. upward sloping D. hump shaped

A

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm's ability to A. sell any quantity it wishes at the prevailing market price. B. raise its price without losing all of its customers. C. choose any combination of price and quantity. D. lose fewer customers than a monopoly that raised its prices.

A

When a firm makes plans for investments in physical capital, it compares the _______________ on these investments with ______________________ . A. projected rates of return; the cost of financial capital to the firm B. present inputs of physical capital; future hurdle rates C. present inputs of physical capita; future marginal revenue product D. projected rates of return; the competitive pressures for labor

A

Why are the underlying economic meanings of the perceived demand curves for a monopolist and monopolistic competitor different? A. a monopolist faces the market demand curve and a monopolist competitor does not B. a monopolist competitor faces the market demand curve and a monopolist does not C. because the demand curve for a monopolistic competitor is upward sloping D. because the demand curve perceived by the monopolist is flatter than that of a monopolist competitor

A

42. Refer to the diagram above. In this instance, point e shown on the graph indicates A. the point where profits will increase by increasing output B. the point where profits will increase by reducing output C. the profit-maximizing point where MR = MC D. the profit-maximizing point where MR is less an MC

B

61. Neil's Bakery is famous for its giant cinnamon buns. The bakery has fixed costs of $100. Neil must pay each worker a wage of $10.00 per hour and each works an 8 hour shift. He earns $2 for each cinnamon bun that is sold. The following table shows how many cinnamon buns he can sell, depending on the number of workers he hires. Refer to the table below. To maximize his profits in this competitive market, how many workers should he hire?A. 2 workers B. 3 workers C. 4 workers D. 5 workers

B

Even when competitive firms are unable to calculate marginal revenue product directly, _________________________________________ will push wage rates toward the marginal revenue product of labor. A. planned future investment in physical capital B. the pressures of competition in the labor market C. the marginal workers ongoing skills training D. wages that exceed workers' net revenue product

B

For a perfectly competitive firm, the marginal cost curve is identical to the firm's ________________ . A. demand curve B. supply curve C. average total cost curve D. average variable cost curve

B

I'maSolarPanelCo. manufactures and distributes solar panels in the US market. Two years ago, it had 5 US competitors, but government stimulus in the industry has encouraged 7 new US competitors to enter the market. In these circumstances, I'maSolarPanelCo.'s price for its output A. can be tailored to exceed the price of its inputs. B. is dictated by the forces of demand and supply. C. can be tailored to meet the price of its inputs. D. can be set by management to maximize profits.

B

Idaho farmers can sell as large a quantity of their potato crop as they wish, A. if they set their own price in the short run, but in the long run, the market sets the price. B. provided each is willing to accept the prevailing market price. C. if they set their own price in the long run, but in the short run, the market sets the price. D. provided quality is perceptible and determines the market price.

B

Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers, cooks, electricity, food, etc. average out to $3.95 per meal. Her costs for rent, insurance cleaning supplies and business license average out to $1.25 per meal. Since the market is highly competitive, Kate should A. raise her prices above the perfectly competitive level set by the market. B. keep the business open in the short-run, but plan to go out of business in the long-run. C. keep the business open in the short-run, and plan to expand the business in the long-run. D. lay-off her staff, break her lease, and close the business down immediately.

B

Product differentiation may occur in _______________ because ____________________ created strong preferences for certain brands. A. shaping intangible preferences; predatory pricing B. the minds of buyers; past habits and advertising C. imperfect competition; the concept of differentiated products D. imperfect competition; advertising and consumer habits

B

The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to A. determine total revenue, total cost, and profit B. select the profit maximizing quantity to produce C. determine what price to charge for the product D. determine average costs, total revenue, and profit

B

The typical slope of the demand curve as perceived by a monopolistic competitor will A. be steeper than the demand curve perceived by a monopolist. B. reflect that firm's ability raise its price without losing all of its customers. C. show less of a decline in demand than would a monopoly that raised its prices. D. be reflective of a perfectly competitive firm and all of the above.

B

What role can advertising play with respect to differentiated products? A. allows a firm to sell any quantity it wishes B. shapes consumers intangible preferences C. shapes perceived demand for a price taker D. allows a firm to raise the prevailing market price

B

When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is A. considering opportunity costs. B. preparing to exit operations. C. preparing to reach its shutdown point. D. considering capital investments.

B

When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the _________________ of investing in physical capital. A. typical hurdle rate B. opportunity cost C. degree of risk D. hurdle rate premium

B

Which of the following would be classified as a differentiated product produced by a monopolistic competitor? A. natural gas B. Channel No. 5 C. electricity D. tap water

B

_________ arises when firms act together to reduce output and keep prices high. A. Collusion B. A cartel C. A monopoly D. An oligopoly

B

66. The table below sets out the amount of capital needed for certain investment projects and the rate of return for each project. What is this firm's demand for physical capital if their hurdle rate is 5%? A. $11 million B. $12 million C. $23 million D. $33 million

C

A manufacturer would likely make an ___________ in a market following the long-run process of beginning and expanding production in response to ________________ . A. accounting profit; a strategy to grow profits B. accounting profit; an incentive for profit C. entry; a sustained pattern of profits D. entry; an incentive to add to profits

C

If a graph is used to compare total revenue and total cost of a perfectly competitive firm, then the horizontal axis of the graph will represent the _______________ and the vertical axis will represent ______________________ . A. price, measured in dollars; quantity of goods produced B. total costs measured in dollars; quantity of goods produced C. quantity produced; both total revenue and total costs, measured in dollars. D. quantity produced; total revenue and total variable costs, measured in dollars.

C

If a monopoly or a monopolistic competitor raises their prices, the quantity demanded ____________. A. will expand B. stays the same C. will decline D. will decline in the short run

C

If accounting profits for a firm are 20% of output, and the opportunity cost of financial capital is 8% of output, then what do the firm's economic profits equal? A. 6% of output B. 10% of output C. 12% of output D. 8% of output

C

If marginal cost is rising in a competitive firm's short-run production process and its average variable cost is falling as output is increased, then A. marginal cost is above average variable cost. B. marginal cost is below average fixed cost. C. marginal cost is below average variable cost. D. average fixed cost is constant

C

If the average product for six workers is fifteen and the marginal product of the seventh worker is eighteen, then A. marginal product is rising. B. marginal product is falling. C. average product is rising. D. average product is falling.

C

In the _________, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where _____________________ . A. long run; increasing production B. short run; fixed costs can be reduced C. short run; losses are smallest D. long run; fixed costs can be eliminated

C

In the _________, the perfectly competitive firm will seek out ________________________ . A. long run; the quantity of output where profits are highest B. short run; profits by ignoring the concept of total cost analysis C. short run; the quantity of output where profits are highest D. long run; methods to reduce production and shut down

C

It is said that in a perfectly competitive market, raising the price of a firm's product from the prevailing market price of $179.00 to $199.00, ____________________. A. will likely cause the firm to reach its shutdown point immediately B. will cause the firm to recover some of its opportunity costs C. could likely result in a notable loss of sales to competitors D. is a sure sign the firm is raising the given price in the market

C

Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to A. be socially responsible. B. be environmentally responsible. C. differentiate their product. D. be perceived more favorably.

C

Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products, they engage in what economists call ________________________. A. a cartel B. collusion C. monopolistic competition D. perfect competition

C

Temperatures have persisted below freezing levels in Florida throughout the months of December and January. As a result, demand for electricity sharply increased and the price of electricity rose sharply. The price of coal also rose. In these circumstances, any resulting shifts in the supply curves for coal miners and electricity producers A. will determine what price to produce at given the market demand. B. at all levels of output shifts marginal costs to the right. C. can also be interpreted as shifts of their respective marginal cost curves. D. shifts marginal costs to the right enabling both to produce more at any given market price.

C

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is A. oligopoly collusion. B. prisoner's dilemma. C. game theory. D. collusion theory

C

The demand curve as perceived by a monopolistic competitor is ______________ . A. upward-sloping B. U shaped C. downward-sloping D. flat

C

The term _________________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. A. price setter B. business entity C. price taker D. trend setter

C

Which of the following can be thought of as an adjustment for the risks involved with respect to the cost of a firm acquiring financial capital? A. higher retained earnings from past profits B. cost of financial capital paid by a firm C. imposition of hurdle rates of interest D. tax credits for physical capital investments

C

Why are some producers forced to sell their products at the prevailing market price? A. price takers find market analysis is too costly B. they are very small players in the overall market C. high degree of similarity to competitor's products D. they can increase output without affecting quality

C

_____________ occurs when circumstances have allowed several large firms to have all or most of the sales in an industry. A. Collusion B. A monopoly C. An oligopoly D. A cartel

C

41. Refer to the diagram above. In this instance, the marginal revenue curve A. reflects a perfectly competitive firm B. is equal to the price of the good C. is a horizontal straight line D. reflects each of the above

D

44. Refer to the diagram above. Based on the information illustrated in this graph, which of the following is an accurate statement? A. production should keep expanding because MR is always less than MC B. because this is a perfectly competitive firm, the profit maximizing rule is not P = MC C. because this is a perfectly competitive firm, the profit maximizing rule is not P = MR D. profits will be reduced by production in the zone where MC exceeds MR

D

67. The table below sets out the amount of capital needed for certain investment projects and the rate of return for each project. What is this firm's demand for physical capital if their hurdle rate is 8%? A. $1.5 million B. $2 million C. $250,000 D. $500,000

D

If monopolistic competitors must expect a process of entry and exit like perfectly competitive firms, A. they will be unable to earn higher-than-normal profits in the short run. B. they will wish to cooperate to make decisions about what price to charge. C. they will wish to cooperate to make decisions about what quantity to produce. D. they will be unable to earn higher-than-normal profits in the long run.

D

If the CEO of I'MaBigBank is playing prisoner's dilemma then, from his perspective, the gains to be had from cooperation are A. larger than the payoffs that will be received. B. smaller than the payoffs that will be perceived. C. smaller than the rewards from pursuing self-interest. D. larger than the rewards from pursuing self-interest.

D

In a monopolistic competitive industry, firms can try to differentiate their products by A. creating optimal perceptions of the product. B. choosing optimal locations from which the product is sold. C. enhancing the intangible aspects of the product. D. enhancing product's physical aspects and all of the above.

D

In a perfectly competitive market setting, which of the following would be a true statement? A. Market price automatically sets itself exactly at equilibrium. B. Market price rarely trends toward the equilibrium value. C. Wage rates mirror marginal revenue product levels exactly. D. Wage rates trend toward marginal revenue product levels.

D

In economics, labor demand is synonymous with A. market demand. B. average demand. C. marginal demand. D. derived demand.

D

In economics, the term "shutdown point" refers to the point where the A. marginal cost curve crosses the total revenue curve. B. average variable cost curve crosses the total revenue curve. C. average variable cost curve crosses the marginal cost curve. D. marginal cost curve crosses the average variable cost curve.

D

In the highly competitive setting in which oligopoly firms operate, which of the following are considered to be typical temptations each may face? A. to cooperate to generate and then divide up monopoly-like profits B. to cooperate to mutually decide what price to charge C. to cooperate to make decisions about what quantity to produce D. to cooperate to act as a single monopoly and all of the above

D

The fact that a consumer is not required to buy the goods that a given firm produces, as well as the fact that the consumer might want the goods a firm produces, but may choose to buy from other firms instead A. will reduce the revenue a firm receives and it should shut down. B. means the firm has reached it shutdown point and should exit. C. is part of the process to a sustained pattern of profits. D. are two stark realities any business firm must recognize.

D

What happens in a perfectly competitive industry when economic profit is greater than zero? A. existing firms may expand their operations B. firms may move along their LRAC curves to new outputs C. there may be pressure on the market price to fall D. new firms may enter the industry and all of the above

D

When I'MaGoldMiner chooses what quantity of gold each of it/s mines will produce over the next 12 months, this quantity, along with the prices prevailing in the market for output and inputs, will A. determine the company's annual revenue, variable costs and its profits. B. no longer be dictated by the forces of demand and supply. C. have no effect on the market forces of demand and supply. D. determine the company's total revenue, total costs, and its profits

D

Which of the following best identifies what the concept of differentiated products is closely related to? A. unique style. B. the degree of monopolistic competition that exists. C. optimal location. D. the degree of product variety that is available.

D

Why would a profit-seeking firm need to tailor its decisions about the quantity of labor inputs that it purchases? A. to produce the highest profitable quantity of output at the lowest possible marginal cost B. deciding what quantity to produce is one of the major choices a profit-seeking firm makes C. the quantity of labor is the only variable cost choice a profit-seeking firm can make D. to produce the profit-maximizing quantity of output at the lowest possible average cost

D

Would raising the price for a product create a larger decline in quantity demanded for a monopolistic competitor's than it would for a monopoly? A. no; a monopolistic competitor perceives demand as a price maker B. no; conditions of imperfect competition means demand is constant C. yes; but temporarily because price increases only create a short-run decline D. yes; consumers will buy from competitors offering lower priced substitutes

D