Chapters 12,13,14
Which of the following nations is not a member of the OPEC oil cartel?
Norway.
Which of the following occupations is not among the ten projected fastest-growing U.S. occupations in terms of percentage increases?
School teachers.
Pure monopoly refers to:
a single firm producing a product for which there are no close substitutes.
In 2011, advertising expenditures in the United States were:
about $103 billion.
Nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
Excess capacity refers to the:
amount by which actual production falls short of the minimum ATC output.
Marginal revenue product measures the:
amount by which the extra production of one more worker increases a firm's total revenue.
The gains to monopolists from exercising market power:
are less than the losses to consumers in monopoly markets, resulting in a net loss to society.
The kinked-demand curve of an oligopolist is based on the assumption that:
competitors will follow a price cut but ignore a price increase.
A monopolistically competitive firm has a:
highly elastic demand curve.
Suppose firms in a collusive oligopoly decide to establish their prices at a level that discourages new rivals from entering the industry. This is called
limit pricing.
A natural monopoly occurs when:
long-run average costs decline continuously through the range of demand.
Monopolistic competition means:
many firms producing differentiated products.
(Last Word): Amazon's rise to become the world's largest online retailer was largely driven by:
massive economies of scale in distribution logistics and data storage.
Under monopolistic competition, entry to the industry is:
more difficult than under pure competition but not nearly as difficult as under pure monopoly.
The substitution effect indicates that a profit-seeking firm will use:
more of an input whose price has fallen and less of other inputs in producing a given output.
Mutual interdependence means that each oligopolistic firm:
must consider the reactions of its rivals when it determines its price policy.
Resource pricing is important because:
of all of these reasons.
Price discrimination is:
only illegal if used to lessen or eliminate competition.
elasticity of resource demand is measured by the:
percentage change in resource quantity demanded divided by the percentage change in resource price.
Concentration ratios measure the:
percentage of total industry sales accounted for by the largest firms in the industry.
The purely competitive employer of resource A will maximize the profits from A by equating the:
price of A with the MRP of A.
Homogeneous oligopoly exists where a small number of firms are:
producing virtually identical products.
The elasticity of resource demand measures the:
responsiveness of producers to changes in resource prices.
A profit-maximizing firm employs resources to the point where:
MRP = MRC.
Which of the following is correct?
A purely competitive firm is a "price taker," while a monopolist is a "price maker."
Which of the following is a characteristic of pure monopoly?
Barriers to entry.
(Last Word) In the Internet search market:
Google holds about 70 percent of the market, while Bing and Yahoo together comprise about 28 percent.
Which of the following is characteristic of a pure monopolist's demand curve?
It is the same as the market demand curve.
Which of the following occupations is projected to be the fastest growing in the U.S. in terms of percentage increases?
Personal care aides.
Which of the following occupations is among the ten projected most rapidly declining U.S. occupations in terms of percentage increases?
Postal service workers.
Which of the following is not a barrier to entry?
X-inefficiency.
Oligopolistic industries are characterized by:
a few dominant firms and substantial entry barriers.
The term oligopoly indicates:
a few firms producing either a differentiated or a homogeneous product.
Three major means of collusion by oligopolists are:
cartels, informal understandings, and price leadership.
The marginal productivity theory of income distribution suggests that:
each individual should receive income based on his or her contribution to total output.
When the elasticity coefficient for resource demand is greater than one, resource demand is:
elastic.
The four-firm sales concentration ratio for an industry measures the:
extent to which the four largest firms dominate the production of a good.
A purely monopolistic firm
faces a downsloping demand curve.
X-inefficiency refers to a situation in which a firm:
fails to achieve the minimum average total costs attainable at each level of output.
A simultaneous game is said to exist when:
firms choose their strategies at the same time as their rivals.
In the United States cartels are:
in violation of the antitrust laws.
The marginal productivity theory of income distribution has been criticized because:
income from inherited property is inconsistent with the theory.
When the elasticity coefficient for resource demand is less than one, resource demand is:
inelastic.
(Last Word) The U.S. Internet search market:
is dominated by Google, which controls about 70 percent of the market.
The MRP curve for labor:
is downsloping and shows the relationship between wage rates and the quantity of labor demanded.
Game theory
is the analysis of how people (or firms) behave in strategic situations.
The MRP curve for labor:
is the firm's labor demand curve.
Marginal product is:
the amount an additional worker adds to the firm's total output.
The marginal revenue product schedule is:
the firm's resource demand schedule.
Marginal resource cost is:
the increase in total resource cost associated with the hire of one more unit of the resource.
The change in a firm's total revenue that results from hiring an additional worker is measured by:
the marginal revenue product.
Price discrimination refers to:
the selling of a given product at different prices to different customers that do not reflect cost differences.
