Microeconomics / Final Exam Review

The purpose of antitrust laws is to: a. reduce anticompetitive activities. b. regulate electric companies. c. guarantee worker safety. d. promote quality products.

a. reduce anticompetitive activities

In the long run, the demand curve for the monopolistic competitive firm shown in Exhibit 10-1: a. shifts leftward. b. remains the same. c. shifts rightward. d. none of these.

a. shifts leftward

Which of the following is a difference between a monopolist and a firm in perfect competition? a. The marginal revenue curve is downward-sloping. b. Marginal revenue equals price. c. Economic profits are zero in the long-run. d. The marginal revenue curve lies above the demand curve.

a. the marginal revenue is downward sloping

T/F A monopolistic competitive firm in the long run sets price equal to the minimum point on the long-run average cost curve.

false

T/F A monopoly can successfully price discriminate as long as there are no close substitutes for its product.

false

T/F A natural monopoly maximizes profits at the point at which price equals minimum average total cost.

false

T/F In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

false

T/F Regardless of the demand for its product, a monopolist will be able to earn positive economic profits.

false

At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve, total revenue is: a. greater than 1. b. maximum. c. less than 1. d. equal to zero.

maximum

The Federal Trade Commission Act was passed in

1914

In Exhibit 8-10, following the rule regarding MR and MC, the most profitable output level is: 0. 1. 2. 3. 4.

3

Which of the following points in Exhibit 9-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve? A. B. C. C and B.

C and B

In order to obtain a conviction for price-fixing under the Sherman Antitrust Act, the government needs to prove: a. only that an attempt to fix prices was made. b. that there was a price-fixing agreement that actually lessened competition. c. that there was a high concentration ratio for the industry. d. all of these.

a. only that an attempt to fix prices was made

In Exhibit 11-3, the wage for the 6th employee is equal to: a. $18. b. $36. c. $3. d. $108.

a. $18

Which of the following statements is true? a. A monopsony is the only employer of a factor of production. b. A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. c. A monopsony has a marginal factor cost curve which lies below its supply curve of labor. d. Unions are becoming a greater influence in American labor markets. e. All of these.

a. a monopsony is the only employer of a factor of production

In monopolistic competition if there is profit, there is: a. a signal for new firms to enter. b. a motive for existing firms to increase prices. c. proof that advertising works. d. a motive for existing firms to decrease prices. e. product differentiation.

a. a signal for new firms to enter

A merger between McDonald's and Burger King would be called a: a. horizontal merger. b. vertical merger. c. conglomerate merger. d. cartel. e. game theory.

a. horizontal merger

A merger between firms that compete in the same market is called a: a. horizontal merger. b. vertical merger. c. conglomerate merger. d. monopoly.

a. horizontal merger

In the long run, a monopolistic competitive firm will operate at a price which: a. is higher than minimum long-run average cost. b. equals minimum long-run average cost. c. equals marginal cost. d. none of these.

a. is higher than minimum long-run average cost.

If the wage rate is fixed at a certain level, the: a. labor supply curve is horizontal. b. labor supply is a straight upward sloping line. c. MP must be constant. d. labor supply will increase at an increasing rate. e. labor supply will increase at a decreasing rate.

a. labor supply curve is horizontal

Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve. The firm will: a. make an economic profit. b. stay in operation in the short run, but shut down in the long run. c. shut down in the short run. d. lower the price.

a. make an economic profit

Which of the following is not associated with the monopoly market structure? a. Many sellers. b. A single seller. c. A unique product. d. Impossible entry into the market.

a. many sellers

A profit-maximizing monopolist will continue expanding output as long as: a. marginal revenue exceeds marginal cost. b. marginal revenue is positive. c. the cost of producing an additional unit exceeds the marginal revenue derived from the unit. d. economic profit is more than zero.

a. marginal revenue exceeds marginal cost

The per se rule refers to the interpretation of the courts that dominant firms should be broken up because of their: a. market share of dominance. b. history of illegal business practices. c. price discrimination practices. d. All of these.

a. market share of dominance

Which of the following is a characteristic of an oligopoly? a. Mutual interdependence in pricing decisions. b. Independent pricing decisions. c. Lack of control over prices. d. All of these are true.

a. mutual interdependence in pricing decisions

When a perfectly competitive firm or a monopolistically competitive firm is making zero economic profit, a. no firms will want to enter or exit. b. some firms will want to leave. c. some firms will want to enter. d. market demand shifts to the left. e. the price of the output will rise in the long run.

a. no firms will want to enter or exit

The best number of workers for any employer to hire is that quantity in which: a. the marginal revenue product equals the marginal factor cost. b. the marginal revenue product exceeds the marginal factor cost. c. total costs are minimized. d. total revenue is maximized. e. none of these

a. the marginal revenue product equals the marginal factor cost

Which of the following best explains why the monopolist's marginal revenue is less than the selling price? a. to sell more units, the monopolist must reduce price on all units sold. b. As the monopolist expands output, the average total cost will decline. c. The monopolist charges each consumer the highest possible price. d. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

a. to sell more units, the monopolist must reduce price on all units sold

Marginal revenue is the change in: a. total revenue resulting from a one-unit change in output. b. total revenue resulting from a change in marginal cost. c. price resulting from a one-unit change in output. d. none of these.

a. total revenue resulting from a one-unit change in output

A firm that places its assets in the custody of a board of trustees is called a: a. trust. b. combination. c. cartel. d. all of these.

a. trust

A merger of firms with a supplier is a: a. vertical merger. b. conglomerate merger. c. monopoly merger. d. horizontal merger.

a. vertical merger

As represented in Exhibit 10-1, the maximum long-run economic profit earned by this monopolistic competitive firm is: a. zero. b. $200 per day. c. $1,000 per day. d. $20,000 per day.

a. zero

As shown in Exhibit 9-4, in order to maximize its profit (or minimize its loss), how much output should the monopoly produce? a. 2 units per hour. b. 4 units per hour. c. 6 units per hour. d. 8 units per hour.

b. 4 units per hour

The antitrust legislation that made it illegal for a firm to pay cash for a competitor's patents, plant, and equipment was the: a. Sherman Antitrust Act. b. Celler-Kefauver Act. c. Robinson-Patman Act. d. Clayton Act. e. FTC Act.

b. Celler-Kefauver Act

Which of the following is the best example of a firm operating in a monopolistically competitive market? a. A Kansas wheat farmer. b. TGI Fridays, a family restaurant. c. U.S. Postal Service. d. Boeing, an aircraft manufacturer

b. TGI Fridays

Suppose costs are identical for the two firms in Exhibit 10-6. Each firm assumes without formal agreement that if it sets the high price its rival will not charge a lower price. Under these "tit-for-tat" conditions, equilibrium will be established by: a. Widget Co. charging the high price and Ajax Co. charging the low price. b. Widget Co. charging the high price and Ajax Co. charging the high price. c. Widget Co. charging the low price and Ajax Co. charging the low price. d. Widget Co. charging the low price and Ajax Co. charging the high price.

b. Widget Co. charging the high price and Ajax Co. charging the high price.

Price discrimination requires: a. a firm to be a competitive firm. b. a firm to be able to segment its customers based on different price elasticities of demand. c. arbitrage. d. that the product can be easily resold.

b. a firm to be able to segment its customers based on different price elasticities

A cartel is: a. a joint venture of two companies. b. a joining of firms for the purpose of fixing prices and controlling output. c. a breaking up of a company into two or more parts. d. the joining of industry with government to solve a specified problem. e. the joining of two firms with unrelated products.

b. a joining of firms for the purpose of fixing prices and controlling output

For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of: a. price discrimination b. a tying contract. c. an interlocking directorate. d. exclusive dealing.

b. a tying contract

A merger between an auto manufacturer and a steel mill would result in which of the following? a. A conglomerate merger. b. A vertical merger. c. A horizontal merger. d. A monopoly merger.

b. a vertical merger

In order to make oil profits as large as possible, OPEC meets to set oil production quotas for its members. OPEC is best classified as a: a. monopoly. b. cartel. c. kinked demand industry. d. price-leadership industry.

b. cartel

Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would: a. charge a lower price than the perfectly competitive firm. b. charge a higher price than the perfectly competitive firm. c. charge the same price as the perfectly competitive firm. d. refuse to operate in the short run unless an economic profit could be made. e. refuse to operate in the short run if an economic loss was present.

b. charge a higher price than the perfectly competitive firm

As shown in Exhibit 9-7, in the short run, the monopoly will: a. earn an hourly profit of $240. b. earn an hourly profit of $80. c. break-even (i.e., earn zero economic profit). d. suffer an hourly loss of $160.

b. earn an hourly profit of $80

Which barrier to entry results in the creation of a natural monopoly? a. Legal barriers like government franchises. b. Economies of scale. c. Ownership of a vital resource. d. Patents and copyrights.

b. economies of scale

Which of the following is not a characteristic of the structure of perfectly competitive markets? a. Each individual firm is small in size relative to the overall market. b. Few sellers. c. Homogeneous product. d. Easy, low cost entry and exit.

b. few sellers

Which of the following is not a characteristic of the structure of perfectly competitive markets? a. Each individual firm is small in size relative to the overall market. b. Few sellers. c. Homogeneous product. d. Easy, low-cost entry and exit.

b. few sellers

If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do? a. Stay at its current output level. b. Hire additional workers. c. Raise product prices. d. Reduce employment. e. Purchase new technology.

b. hire additional workers

If an employer currently finds that the MRP of its labor resources equals $67, and the MFC equals $56, what would you advise the firm to do? a. stay at its current output level. b. Hire additional workers. c. Raise product prices. d. Reduce employment. e. Purchase new technology.

b. hire additional workers

A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do? a. Shut down. b. Increase output. c. Stay at current output. d. Decrease output. e. Decrease price.

b. increase output

Featherbedding allows unions to increase wages by: a. limiting the supply of labor. b. increasing firms' demand for labor. c. forcing firms to accept higher-than-equilibrium wages. d. reducing labor share of payroll taxes.

b. increasing firms' demand for labor

Compared to the perfectly competitive outcome, monopolistically competitive markets will result in: a. a wider variety of products and higher prices. b. less product variety and higher prices. c. a wider variety of products and lower prices. d. less product variety and lower prices.

b. less product variety and higher prices

Under both perfect competition and monopoly, a firm: a. is a price taker. b. maximizes profit by setting marginal cost equal to marginal revenue. c. will shut down in the short-run if price falls short of average total cost. d. always earns a pure economic profit.

b. maximizes profit by setting marginal cost equal to marginal revenue

What is the key feature shared by all oligopoly markets? a. A large number of sellers. b. Mutual interdependence. c. Product differentiation. d. Easy entry and exit.

b. mutual interdependence

The practice of firms temporarily reducing prices in order to eliminate competition is called: a. competitive pricing. b. predatory pricing. c. discount pricing. d. strategic pricing.

b. predatory pricing

Product differentiation: a. refers to the attempt of firms to make their products look like those of the other firms in the industry. b. refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers. c. refers to the advantage big firms have in research and development. d. is a common characteristic of a perfectly competitive market structure. e. is only employed in a monopoly market structure.

b. refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers.

According to the kinked demand theory, when one firm raises its price, other firms will: a. also raise their prices. b. refuse to follow. c. increase their advertising expenditures. d. exit the industry.

b. refuse to follow

The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal: a. product. b. revenue product. c. cost. d. none of these.

b. revenue product

BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost? a. $6.25 per hour. b. $12.50 per hour. c. $18.75 per hour. d. $20 per hour.

c. $18.75 per hour

Which act of Congress declared tying contracts, exclusive dealing, and price discrimination illegal? a. Celler-Kefauver Act. b. Sherman Antitrust Act. c. Clayton Act. d. Robinson-Patman Act.

c. Clayton Act

The firm's demand for labor curve is exactly the same as the: a. wage rate. b. price of the output. c. MRP curve. d. MP curve. e. labor supply curve.

c. MRP curve

The antitrust law that prohibits firms from combining or conspiring to restrain trade in interstate commerce is the: a. Federal Trade Commission Act. b. Clayton Act. c. Sherman Antitrust Act. d. Robinson-Patman Act.

c. Sherman Antitrust Act

The first federal antitrust law was the: a. Clayton Act. b. Federal Trade Commission Act. c. Sherman Antitrust Act. d. Interstate Commerce Act.

c. Sherman Antitrust Act

Which of the following is an amendment to the Clayton Act that strengthened it against price discrimination? a. The Sherman Antitrust Act. b. The Federal Trade Commission Act. c. The Robinson-Patman Act. d. The Celler-Kefauver Act.

c. The Robinson-Patman Act

Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company? a. A horizontal merger. b. A vertical merger. c. A conglomerate merger. d. A monopoly merger.

c. a conglomerate merger

A natural monopoly is a market where: a. a single firm has control over a vital natural resource. b. many smaller firms can produce the entire market output at the same per-unit cost as could one large firm. c. a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms. d. many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.

c. a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms

A manufacturer will sell its product only to retailers who agree to buy its brand. This is an example of: a. price discrimination. b. exclusive dealing. c. a tying contract. d. interlocking directorates.

c. a tying contract

The purpose of a cartel is to: a. promote product innovation. b. increase market competition. c. act like a monopoly. d. diversify operations. e. decrease market concentration.

c. act like a monopoly

For a monopoly to successfully price discriminate, its customers must: a. feel that the product is a necessity. b. have identical demands. c. be unable to resell the product. d. actively engage in arbitrage.

c. be unable to resell the product

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must: a. lower the product price to sell more. b. increase the price of its product to sell more. c. decrease the factor price to hire more. d. lower the factor price to hire more. e. none of these.

c. decrease the factor price to hire more

A monopsony will: a. hire more workers than a competitive employer. b. pay a higher wage than a competitive employer. c. employ a quantity of labor where the marginal revenue product equals the marginal factor cost. d. all of these.

c. employ a quantity of labor where the marginal revenue product equals the marginal factor cost

In the 1945 Alcoa antitrust case, the Court found ALCOA: a. not guilty of violating the Sherman Antitrust Act because it was a good monopoly. b. did not have a good reason for having a large market share, so found it guilty. c. guilty because its firm size was a per se violation of antitrust laws. d. not guilty because it did not engage in any illegal or unfair acts. e. was no threat to industrial democracy.

c. guilty because its firm size was a per se violation of antitrust laws

Compared to a perfectly competitive firm with the same cost structure, a monopoly firm will charge a: a. higher price and sell more. b. lower price and sell more. c. higher price and sell less. d. lower price and sell less. e. similar price and sell the same.

c. higher price and sell less

The strategy underlying price discrimination is to: a. charge higher prices to customers who have better access to substitutes. b. charge everyone the same price but limit the quantity they are allowed to buy. c. increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand. d. reduce per-unit costs by charging higher prices to those with the most elastic demand and lower prices to those with the most inelastic demand.

c. increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand

Mutual interdependence among firms in an oligopoly means that: a. firms never practice price leadership. b. firms never form a cartel. c. it is difficult to know how firms will react to decisions of rivals. d. no formal agreement is possible among firms.

c. it is difficult to know how firms will react to decisions of rivals

Which of the following firms best fits the definition of a monopoly? a. General Motors b. Exxon Mobile c. Local electric utility d. AT&T

c. local electric utility

Profit is maximized when which of the following conditions occurs? a. Total revenue equals total cost. b. Average revenue equals average cost. c. Marginal revenue equals marginal cost. d. Both b. and c. above are correct.

c. marginal revenue equals marginal cost

Game theory is an especially useful model for analysis in the following types of markets: a. perfect competition. b. monopolistic competition. c. oligopoly. d. monopoly.

c. oligopoly

When the price of a good is a constant, the marginal revenue per unit of output is the same as: a. total revenue. b. average total cost. c. price. d. quantity of output. e. profit per unit.

c. price

For a perfectly competitive firm, marginal revenue product is equal to: a. price minus marginal cost. b. price times marginal revenue. c. price times marginal product. d. none of these.

c. price times marginal product

A monopolist will maximize profits by: a. setting his price as high as possible. b. setting his price at the level that will maximize per-unit profit. c. producing the output where marginal revenue equals marginal cost. d. producing the output where price equals marginal cost.

c. producing the output where marginal revenue equals marginal cost

The Clayton Act of 1914: a. was too vaguely worded to reduce anticompetitive behavior significantly b. prohibited conspiracies in restraint of trade c. prohibited price discrimination that reduces competition and cannot be justified based on cost differences d. created the Federal Trade Commission

c. prohibited price discrimination that reduces competition and cannot be justified based on cost differences

If a monopsony finds that its MRP is greater than its MFC, it: a. is doing the right thing to maximize profits. b. should hire fewer workers to increase profits. c. should hire more workers to increase profits. d. should pay the workers a lower wage. e. should produce less output.

c. should hire more workers to increase profits

How will the price and output of a monopolist compare with perfect competition? a. The output of the monopolist will be too large and the price too high. b. The output of the monopolist will be too large and the price too low. c. The output of the monopolist will be too small and the price too high. d. The output of the monopolist will be too small and the price too low.

c. the output of the monopolist will be too small and the price too high

Suppose there are 100 identical firms producing package delivery services. One of the firms finds that when it has to pay a wage rate of $7, it hires 20 delivery people. The firm charges an average price of $10 to deliver a package. From this information, we know that the package delivery industry is hiring a total of: a. 100 workers. b. 200 workers. c. 700 workers. d. 2,000 workers. e. 10,000 workers.

d. 2,000 workers

Which of the following countries has the largest union membership measured as the percentage of civilian employees in unions? a. The United States. b. Japan. c. The United Kingdom. d. Sweden.

d. Sweden

Which of the following may result in a higher equilibrium price for a product? a. Advertising b. Expectations c. Imperfect information d. All of the above answers are true. e. None of the above answers a.-c. are true.

d. all of the above answers are true

A cartel: a. is a group of firms formally agreeing to control the price and the output of a product. b. has as its primary goal to reap monopoly profits by replacing competition with cooperation. c. is illegal in the United States, but not in other nations. d. all of these.

d. all of these

A monopolized market is characterized by: a. a sole seller of a product for which there are few suitable substitutes. b. very strong barriers to entry. c. a single firm facing the market demand curve. d. all of these.

d. all of these

Compared to a perfectly competitive firm, a monopolist: a. charges a higher price. b. produces lower output. c. fails to achieve an efficient allocation of resources. d. all of these.

d. all of these

Defenders of advertising argue that it: a. informs buyers and broadens the market for goods. b. enhances economic efficiency by lowering prices. c. enables small firms to compete more effectively with large ones. d. all of these.

d. all of these

Supporters of advertising claim that it: a. increases the variety of products. b. attacks established brand loyalties. c. allows new firms to compete. d. all of these.

d. all of these

Which of the following is a game theory strategy for oligopolists to avoid a low-price outcome? a. Tit-for-tat b. Price leadership c. Cartel d. All of these

d. all of these

Which of the following would be a human capital investment? a. On-the-job training programs. b. Health care programs. c. Formal education. d. All of these.

d. all of these

Which of the following is characteristic of the marginal revenue product schedule for a resource? a. It approximates the firm's demand curve for the resource. b. It measures the change in total revenue resulting from employing an additional unit of the resource. c. It is determined by multiplying the marginal product of the resource by the marginal revenue of the good produced. d. All of these are true.

d. all of these are true

____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price. a. Buying short. b. Discounting. c. Tariffing. d. Arbitrage.

d. arbitrage

The Clayton Act: a. was passed in 1890. b. created the Federal Trade Commission. c. abolished antitrust policy in this country. d. attempted to give explicit content to what formed an antitrust violation. e. made mergers between corporations illegal.

d. attempted to give explicit content to what formed an antitrust violation

Which of the following is not one of the four anti-competitive activities outlined in the Clayton Act? a. Price discrimination. b. Exclusive buyer/seller contracts. c. Buying a competitor's voting stock. d. Buying a competitor's plants and equipment. e. Interlocking boards of directors.

d. buying a competitor's voting stock

An organization of sellers designed to coordinate their supply decisions to maximize joint profits is called a: a. consumer cooperative. b. marketing association. c. regulatory agency. d. cartel.

d. cartel

Cartel members have an incentive to cheat on the cartel because: a. the cartel does not maximize profits. b. the cartel price is the competitive price. c. each member's output quota is too high. d. each member's MR is not equal to the cartel's MC. e. the industry profit would be higher under competitive conditions.

d. each member's MR is not equal to the cartel's MC.

A worker's accumulated investment in education, training, experience, and health is called: a. derived labor demand. b. collective entrepreneurship. c. seniority. d. human capital.

d. human capital

An advance in technology which increases labor productivity will shift the: a. labor demand curve to the left. b. MFC curve to the left. c. MP curve downward. d. labor demand curve to the right. e. product demand to the right.

d. labor demand curve to the right

The demand for labor curve is identical to the: a. total wage cost curve. b. marginal resource curve. c. total revenue curve. d. marginal revenue product curve. e. marginal revenue curve

d. marginal revenue product curve

Which of the following statements concerning the supply of labor is true? a. The supply of labor is determined by the prevailing wage rate. b. The labor supply curve is downward sloping. c. The wage rate has no effect on the supply of labor. d. None of these.

d. none of these

Under which one of the following market structures are sellers most likely to consider the reaction of rival sellers when they set the price of their product? a. Perfectly competition. b. Monopoly. c. Monopolistic competition. d. Oligopoly.

d. oligopoly

By producing at the point where MR = MC, the firm: a. is guaranteed a profit. b. will earn a profit of zero. c. will lose money. d. profit is maximized. e. output.

d. profit is maximized

During the first phase of regulation in the United States (from 1887 to the Great Depression), the primary target of regulation was the: a. labor unions. b. communication industry. c. food and drug industries. d. railroads.

d. railroads

Which of the following is the best example of a monopolistically competitive market? a. Wheat. b. Automobiles. c. Diamonds. d. Retail sales.

d. retail sales

Under perfect competition, a firm is a price taker because: a. setting a price higher than the going price results in profits. b. each firm's product is perceived as different. c. each firm has a significant market share. d. setting a price higher than the going price results in zero sales.

d. setting a price higher than the going price results in zero sales

Which of the following is characteristic of a monopolistically competitive firm? a. The firm faces an upward-sloping demand curve. b. The firm faces an inelastic demand curve. c. The firm faces a horizontal demand curve. d. The firm produces a differentiated product.

d. the firm produces a differentiated product

Under the original Clayton Act, which of the following was not illegal? a. Charging different prices for the same product. b. Exclusive dealer agreements. c. The purchase of the stock of a rival firm that lessens competition. d. The purchase of the assets of a rival firm that lessens competition.

d. the purchase of the assets of a rival firm that lessens competition

The demand curve any monopolist uses in making output decisions is: a. the same as the demand curve facing a perfectly competitive firm. b. vertical, because there are no close substitutes for its product. c. horizontal, because there are no close substitutes for its product. d. the same as the market demand curve. e. perfectly inelastic.

d. the same as the market demand curve.

The monopoly price that maximizes profits in Exhibit 9-6 is: a. $4. b. $6. c. $7. d. $8. e. $10.

e. $10

In Exhibit 11-2, if product price is fixed at $5, the MRP of the 4th worker is equal to: a. $35. b. $125. c. $25. d. $175. e. $100.

e. $100

Which of the following is often called the "Antimerger Act"? a. Clayton Act. b. Robinson-Patman Act. c. Sherman Antitrust Act. d. Federal Trade Commission Act. e. Celler-Kefauver Act.

e. Celler-Kefauver Act

Because a competitive firm is a price taker, it faces a demand curve that is: a. perfectly inelastic b. relatively elastic c. relatively elastic d. perfectly elastic

perfectly elastic

A monopsony is a: a. large number of buyers. b. large seller. c. single seller. d. single buyer.

single buyer

T/F According to critics, the Utah Pie case represents a failure by the Supreme Court to distinguish between injury to competition that benefits consumers and injury to a specific competitor.

true

T/F If a monopsonist's labor supply curve is positively sloped, the marginal factor cost (MFC) will exceed the wage rate.

true

T/F In a monopolistically competitive market like retail trade, firms can easily enter and exit the market.

true

T/F Monopsony means a labor market with a single buyer.

true

T/F The Celler-Kefauver Act was passed because the Clayton Act had not been effective against mergers.

true

T/F The Robinson-Patman Act strengthened the merger provisions of the Clayton Act.

true

T/F The monopolist faces the demand curve.

true

T/F When a monopoly price discriminates, it charges the highest price to the group of buyers with the least elastic demand.

true