Econ Test 3
A monopolist never incurs a loss.
False
A monopoly firm can sell as much output as it wants at whatever price it sets.
False
The prisoners' dilemma is an example of a cooperative game.
False
Middle-aged people have lower incomes than older people because older people are more experienced.
False
Other things equal, if the quantity of labor supplied is less than the quantity of labor demanded, wages will tend to fall.
False
The concept of derived demand indicates that the demand for a final good or service is determined by the price of the inputs used to produce that final good or service.
False
A cartel is a group of firms that attempt to collude by coordinating price and output decisions.
True
A price-discriminating monopoly firm will tend to charge a higher price to customers who have an inelastic demand than it does to customers with an elastic demand.
True
If the demand for opera singers increases faster than the supply increases, wages will rise.
True
The key difference between oligopoly and other market structures is the interdependence among producers.
True
Poverty rates tend to be substantially higher for families headed by females than for those headed by married couples.
True
Under oligopoly, a few large firms control most of the production and sale of a product because:
economies of scale make it difficult for small firms to compete.
The demand curve for a monopolistically competitive firm is _____.
more elastic than the demand curve for a monopolist
Which of the following is a major difference between monopolists and firms in perfectly competitive markets?
Monopolists may earn long-run economic profit, while firms in perfectly competitive markets cannot.
Identify the correct statement about game theory.
The Nash equilibrium is a dominant strategy.
Which of the following is not a potential barrier to entry into a product market?
The absence of economies of scale in the product market
Monopolistic competition is characterized by:
a large number of firms selling differentiated products.
Labor unions:
can influence wages by restricting labor supply.
In an oligopoly market, such as the U.S. domestic airline industry, United Airlines would:
carefully anticipate Delta, American, and Southwest's likely responses before it raised or lowered fares.
If an unregulated monopolist operates in a market, then:
customers will pay higher prices than if the market was competitive.
Other things being equal, an increase in the labor force resulting from increased immigration tends to:
decrease wages.
When a firm's demand curve is tangent to its average total cost curve, _____.
economic profits are zero
Oligopolies are characterized by:
high barriers to entry.
Under a progressive tax system, _____.
higher marginal taxes are imposed on higher incomes
Improvements in the productivity of labor will tend to:
increase the demand for labor.
The aim of antitrust policy is to:
prevent firms from acquiring or exercising undue market power.
U.S. public utilities are often:
regulated natural monopolies.
Collective bargaining refers to negotiations between:
representatives of employers and unions.
Pure monopoly is a market structure:
that consists of a single supplier.
The equilibrium wage and quantity in competitive markets for labor are determined by:
the intersection of the labor demand and labor supply curves.
When labor is a firm's only variable input in its production process, a profit-maximizing firm will continue to employ additional workers as long as:
the marginal revenue product of labor exceeds the marginal resource cost.
If the average total cost curve is always above the demand curve for a monopolist, _____.
the monopolist will be suffering from economic losses
The poverty rate is:
the percentage of the population that falls below the poverty line.
On average, middle-aged people tend to have higher incomes than younger or older people do because:
they are at an age where their productivity is at its peak.
When an economy is in a recession, _____ and _____ increase.
unemployment; poverty