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Quiz 7

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Question 1 (1 point)
In long-run equilibrium, monopoly prices are set a level where:
  1. price exceeds marginal revenue
  2. industry demand equals industry supply
  3. industry demand is less than industry supply
  4. price exceeds average revenue
Question 2 (1 point)
For a monopoly in equilibrium:
  1. MR = MC
  2. MC £ AC
  3. MR £ AC
  4. P 3 AC
Question 3 (1 point)
The level of competition in a given market tends to increase if:
  1. minimum efficient scale of firms increases
  2. the number of substitutes increase
  3. significant barriers to exit are imposed
  4. the number of potential entrants decreases
Question 4 (1 point)
A monopsony is a market with:
  1. many sellers
  2. one buyer
  3. many buyers
  4. one seller
Question 5 (1 point)
Government-mandated wage arbitration for employers can enhance efficiency when the labor market involves:
  1. monopoly
  2. excess seller power
  3. perfect competition
  4. monopsony
Question 6 (1 point)
In monopoly competitive markets, profits are maximized when:
  1. MC = AC
  2. P > AC
  3. MR = MC
  4. MR = P
Question 7 (1 point)
The demand curve for a unique product without substitutes is:
  1. upward sloping
  2. downward sloping
  3. horizontal
  4. vertical
Question 8 (1 point)
A monopolist maximizes profits by producing a level of output where:
  1. P = AC
  2. P > MC
  3. P < MC
  4. P = MC
Question 9 (1 point)
In the short run, a monopolist will:
  1. shut down if price equals average total cost
  2. shut down if price is less than average total cost
  3. shut down if price is less than average variable cost
  4. never shut down
Question 10 (1 point)
At the profit maximizing level of output for a monopolist:
  1. P = AR and AR = AC
  2. P = MC and MR > MC
  3. P > MC and MR = MC
  4. P = MR and AC = MC
Question 11 (1 point)
Economic agents that have countervailing power in transactions with monopolists are:
  1. other monopolists
  2. perfect competitors
  3. monopsonists
  4. individual consumers
Question 12 (1 point)
Holding supply conditions constant, the costs of regulation fall wholly on producers when:
  1. eP = ∝
  2. eP 3 1
  3. eP = 1
  4. eP = 0
Question 13 (1 point)
Utility price and profit regulation is based on the perception of:
  1. externalities
  2. diseconomies of scale
  3. natural monopoly
  4. consumers' surplus
Question 14 (1 point)
A natural monopoly exists if:
  1. marginal revenue is falling as output expands
  2. price equals average cost
  3. average cost falls as output expands
  4. marginal revenue equals marginal cost
Question 15 (1 point)
The Sherman Act specifically prohibits:
  1. monopolizing
  2. asset acquisitions that reduce competition
  3. price discrimination
  4. mergers that reduce competition
Question 16 (1 point)
The Clayton Act specifically prohibits:
  1. monopolies
  2. asset acquisitions that reduce competition
  3. price discrimination
  4. conspiracies in restraint of trade
Question 17 (1 point)
The Celler-Kefauver Act specifically prohibits:
  1. mergers that reduce competition
  2. asset acquisitions that reduce competition
  3. tying contracts that reduce competition
  4. conspiracies in restraint of trade
Question 18 (1 point)
The F.T.C. enforces antitrust laws by:
  1. sentencing individuals up to three years imprisonment
  2. awarding triple damages
  3. issuing cease and desist orders
  4. imposing fines on corporations up to $1 million
Question 19 (1 point)
The capture theory states that:
  1. certain industries must be captured by government regulators to promote economic efficiency
  2. some industries actively seek regulation to limit competition and obtain government subsidies
  3. monopoly profits can be captured by society through government regulation
  4. natural monopolists tend to capture the entire market
Question 20 (1 point)
In monopoly markets, market demand is:
  1. perfectly inelastic with respect to price
  2. perfectly elastic with respect to price
  3. elastic with respect to price
  4. inelastic with respect to price
Copyright 2008, by the Contributing Authors. Cite/attribute Resource. admin. (2009, January 27). Quiz 7. Retrieved November 24, 2009, from Free Online Course Materials — USU OpenCourseWare Web site: http://ocw.usu.edu/economics/managerial-economics/quiz7.htm. This work is licensed under a Creative Commons License. Creative Commons License