Micro Assignment 15-19

Roberto consumes Coke exclusively. He aims that there is a clear taste difference and that competing brands of cola leave an unsavory taste in his mouth. In a Mind taste test, Roberto is found to prefer Coke to store-brand cols eight out of ten times. The results of Roberto's taste test would refute claims by critics ofbrand names that A. brand names cause consumers to perceive differences that do not really exist. B. consumers with the lowest levels of income are the most likely to be influenced by brand name advertising. C. consumers are always wiling to pay more for brand names D. brand names are a form of socially efficient advertising

A. brand names cause consumers to perceive differences that do not really exist.

A monopolist's marginal-revenue curve is less than price for which of the following reasons? (i) to sell additional units of the good, the price charged on all units must decrease (ii) with the sale of an additional unit, the monopolist receives less revenue for each of the previous units it planned to sell (ini) because of the downward-sloping demand curve a. (i), (:) and (ini) b. (i) and (in) C. (i) and (ini) d. (i) and (ili)

A: (i), (:) and (ini)

Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the cities of Columbus, Cleveland and Cincinnati, Ohio permanently useless. No people are hurt, and no buildings are damaged. After the accident, the wages earned by Ohio workers will a. decrease because the marginal productivities of Ohio workers will decrease. b. increase because the marginal productivities of Ohio workers will increase. c. increase because the marginal productivities of Ohio workers will decrease. d. decrease because the marginal productivities of Ohio workers will increase.

A: decrease because the marginal productivity of Ohio workers will decrease explanation: without power to run certain technologies, total productivity cannot run at its maximum potential. people could be sent home and lose profits.

Identify the true statement from the following list. a. a monopoly firm has an upward-sloping supply curve and is a price taker b. a monopoly firm has no supply curve and is a price maker c. a monopoly firm has an downward-sloping supply curve and is a price maker d. a monopoly firm is a price taker and has no supply curve

B. a monopoly firm has no supply curve and is a price maker

Which of the following statements are true? (i) in a monopoly, average revenue always equals the price of the good (ii) a monopoly's profit is maximized when price equals marginal revenue (iii) the marginal revenue curve will always lie below the demand curve a. (i), (:), and (in) b. (i) and (ili) only c. (in) and (ili) only d. (i) and (ii) only

B: (i) and (ili) only

Which of the following would most likely to have monopoly power? a. a long distance telephone service provider b. a local cable TV provider c. a large department store d. a gas station

B: a local cable TV provider explanation: a monopoly is a single provider. there are very few cases of large scale true monopolies. something smaller scale is more likely to be that sole provider.

Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired? a. There is insufficient information to answer this question. b. $20 c. $40 d. $10

C. $40

Suppose a pesticide company discovers and patents a new weed killer. This patent gives the company: a. a monopoly right to sell the weed killer for an unlimited number of years b. partial ownership of the right to sell the weed killer for a limited number of years c. a monopoly right to sell the weed killer for a limited number of years d. partial ownership of the right to sell the weed killer for an unlimited number of years

C. a monopoly right to sell the weed killer for a limited number of years

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it a. has no monopoly pricing power b. cannot easily distinguish between the two groups of customers c. can prevent children from buying the lower-priced tickets and selling them to adults d. only shows G-rated movies

C. can prevent children from buying the lower-priced tickets and selling them to adults

When a firm operates under conditions of a monopoly, its price iS: a. not constrained b. constrained by marginal cost c. constrained by demand d. constrained only by its social agenda

C. constrained by demand

If a monopoly sells its good at a level that is below the socially optimal level, the price: a. will equal the intersection of average revenue and marginal cost b. may be inefficiently low or high because a monopolist is a price maker c. will be inefficiently high d. will be inefficiently low

C. will be inefficiently high

Monopoly firms have: a. downward-sloping demand curves and can sell as much as they want at each price b. horizontal demand curves and can sell only a limited amount at each price c. downward-sloping demand curves and can sell only a limited amount at each price d. horizontal demand curves and can sell as much as they want at each price

C: downward-sloping demand curves and can sell only a limited amount at each price

For a monopoly market, total surplus can be defined as the value of the good to: a. producers minus the cost incurred by consumers b. consumers plus the cost of making the good c. producer plus the cost incurred by consumers d. consumers minus the costs of making the good

D: consumers minus the costs of making the good

Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has a. less incentive to advertise than it would otherwise have. b.less market power than it would otherwise have. c. more control over the price of diamonds than it would otherwise have. d.higher profits than it would otherwise have.

b.less market power than it would otherwise have.

Which of the following comparisons best illustrates a compensating differential? a. Sachi's wage is higher than Jake's because the value of Sachi's marginal product is higher than Jake's. b. Avery's wage is higher than Adam's because Avery obtained a college degree, whereas Adam decided to start working after high school. c. Celia's wage is higher than Will's because Celia's job may cause long-term health problems, and Will's job will not impair his health. d. Vena's wage is higher than Kay's because Venya is very personable, and Kay is very gruff.

c. Celia's wage is higher than Will's because Celia's job may cause long-term health problems, and Will's job will not impair his health.

In monopolistically competitive markets, the property of free entry and exit suggests that a. the market structure will eventually be characterized by perfect competition in the long run. b. some firms will be forced to incur economic losses in the long run. c. all firms earn zero economic profits in the long run. d. some firms will be able to earn economic profits in the long run.

c. all firms earn zero economic profits in the long run.

Consider the market for capital equipment. Suppose the market price of firms' output decreases. Holding all else constant, the equilibrium quantity of capital equipment a. increase. b. decrease. c. not change. dt is not possible to determine what will happen to the equilibrium quantity of capital equipment.

decrease

Consider a market served by a monopolist, FirmA. Anew firm,FirmB, enters the market, and as a result, Firm A lowers its price to try to drive Firm B out of the market, This practice is known as. a. resale price maintenance b.predatory typing c.tying d.predatory pricing

predatory pricing