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Which of the following statements is FALSE?

	A.	The larger a market, the greater the competition among sellers in it.
	B.	The definition of a market is uncertain and debatable.
	C.	Once sellers get together, there is always firm agreement on the boundaries of a market.
	D.	The size of a market determines the competition sellers face.

1 points

Question 2

Which of the following statements is true?

	A.	All firms in the same industry must also be in the same market.
	B.	The geographic boundaries of a market could be local, regional, national, or international.
	C.	The boundaries of a market are easily determined, and there is virtually no disagreement as to what those boundaries are.
	D.	All of the above.

1 points

Question 3

The definition of the boundaries of a market can be extremely important in court cases involving:

	A.	usury laws.
	B.	product liability laws.
	C.	antitrust laws.
	D.	minimum wage laws.

1 points

Question 4

Markets with a large number of sellers producing identical products, and that are easy to enter and exit are:

	A.	monopolized.
	B.	purely competitive.
	C.	monopolistically competitive.
	D.	oligopolistic.

1 points

Question 5

An individual seller has no control over the price of its product in:

	A.	oligopoly.
	B.	pure competition.
	C.	monopolistic competition.
	D.	all of the above.

1 points

Question 6

The price a purely competitive seller can get for its product is determined by:

	A.	the forces of supply and demand in the market.
	B.	the seller's bargaining power when dealing with potential buyers.
	C.	government regulators.
	D.	agreements made by sellers in trade association meetings.

1 points

Question 7

If a purely competitive firm's demand curve lies below its average total cost curve, the firm is:

	A.	breaking even.
	B.	earning an economic profit.
	C.	sustaining a loss.
	D.	operating in the long run.

1 points

Question 8

The market structure that serves as the ideal against which the performance of firms in all other market structures is judged is:

	A.	monopoly.
	B.	pure competition.
	C.	oligopoly.
	D.	monopolistic competition.

1 points

Question 9

Markets with a large number of firms selling differentiated products, and where entry into and exit from the market are fairly easy, are:

	A.	monopolies.
	B.	oligopolies.
	C.	pure competitors.
	D.	monopolistic competitors.

1 points

Question 10

A market has a large number of sellers that produce differentiated products and have limited control over their prices. Entry into this market by new sellers is fairly easy. This market is:

	A.	monopolistically competitive.
	B.	monopolized.
	C.	purely competitive.
	D.	an oligopoly.

1 points

Question 11

The demand curve for an individual seller in monopolistic competition is:

	A.	downward sloping.
	B.	upward sloping.
	C.	perfectly vertical.
	D.	perfectly horizontal.

1 points

Question 12

In a monopolistically competitive market, a firm can have some control over the price of its product due to:

	A.	service.
	B.	location.
	C.	advertising.
	D.	all of the above.

1 points

Question 13

The most frequently found market structure in the United States is:

	A.	pure competition.
	B.	monopoly.
	C.	monopolistic competition.
	D.	oligopoly.

1 points

Question 14

An important factor explaining the behavior of sellers in oligopolistic markets is:

	A.	that each seller feels it has no control over the price of its product.
	B.	government controls over decision making by all sellers in these markets.
	C.	mutual interdependence.
	D.	that each seller faces no direct competition from the other sellers.

1 points

Question 15

The primary cause of mutual interdependence is:

	A.	easy entry of new sellers into a market.
	B.	few sellers in a market.
	C.	the antitrust laws.
	D.	widespread product differentiation.

1 points

Question 16

Which of the following statements about oligopoly markets is true?

	A.	Restricted entry makes it difficult for new competitors to come into the market.
	B.	Unlike pure competitors, oligopolists can operate inefficiently over the long run.
	C.	Individual sellers can earn economic profits over both the short run and the long run.
	D.	All of the above.

1 points

Question 17

An arrangement whereby sellers in a market formally join together to make decisions as a group on pricing and other matters is a:

	A.	natural monopoly.
	B.	cartel.
	C.	regulated monopoly.
	D.	bilateral monopoly.

1 points

Question 18

A monopolist's demand curve for its product is:

	A.	the same as the market demand curve for the product.
	B.	a kinked demand curve.
	C.	perfectly horizontal at the equilibrium market price.
	D.	downward sloping, but different from the market demand curve for the product.

1 points

Question 19

A monopolist has:

	A.	no direct competitors to take buyers away when it raises its price.
	B.	more control over its price than do sellers in any other market structure.
	C.	both of the above.
	D.	none of the above.

1 points

Question 20

A firm has the greatest control over price in a:

	A.	monopolized market.
	B.	oligopolistic market.
	C.	purely competitive market.
	D.	monopolistically competitive market.

1 points

Question 21

Consumers fare best in terms of price when dealing with sellers in:

	A.	monopolistically competitive markets.
	B.	monopolized markets.
	C.	purely competitive markets.
	D.	oligopolistic markets.

1 points

Question 22

Ranking the market structures from that with the smallest number of sellers to that with the largest number of sellers, respectively, we have:

	A.	monopoly, oligopoly, monopolistic competition, pure competition.
	B.	oligopoly, monopoly, pure competition, monopolistic competition.
	C.	monopoly, monopolistic competition, oligopoly, pure competition.
	D.	monopolistic competition, pure competition, oligopoly, monopoly.

1 points

Question 23

Excess profits can be earned over the long run by:

	A.	oligopolists and monopolistic competitors.
	B.	monopolistic competitors.
	C.	oligopolists.
	D.	monopolistic competitors and pure competitors.

1 points

Question 24

The individual seller's demand curve and the market demand curve are the same in:

	A.	oligopoly.
	B.	monopoly.
	C.	monopolistic competition.
	D.	all of the above.

1 points

Question 25

Firms operate at minimum average total cost in the long run in:

	A.	monopoly.
	B.	pure competition.
	C.	oligopoly.
	D.	monopolistic competition.

1 points

Question 26

The act that amends the Clayton Act in regard to anti-competitive price discrimination is the:

	A.	Celler-Kefauver Act.
	B.	Sherman Act.
	C.	Robinson-Patman Act.
	D.	Federal Trade Commission Act.

1 points

Question 27

A merger between Coca Cola and McDonald's would be:

	A.	a vertical merger.
	B.	a conglomerate merger.
	C.	an interlocking directorate.
	D.	a horizontal merger.

1 points

Question 28

Violations of the antitrust laws involving practices that are not necessarily anticompetitive, such as certain activities of trade associations, are:

	A.	judicial violations.
	B.	Rule of Reason violations.
	C.	semi-violations.
	D.	per se violations.

1 points

Question 29

Rule of reason antitrust violations are:

	A.	illegal business activities where proof of damage is sufficient to establish guilt.
	B.	business practices that become illegal only if they unreasonably restrain competition.
	C.	business practices that become illegal only if there is an unreasonable intent to restrain competition.
	D.	illegal business activities where proof of the activity is sufficient to establish guilt.

1 points

Question 30

Two firms enter into an agreement whereby one will market its product only west of the Mississippi River if the other will market its product only east of the Mississippi River. Such an agreement is:

	A.	a violation of the Robinson-Patman Act.
	B.	an agreement to divide sales territories.
	C.	a Rule of Reason violation of the antitrust laws.
	D.	all of the above.

1 points

Question 31

The federal government agency that plays a major role in antitrust enforcement is the:

	A.	Federal Trade Commission.
	B.	Renegotiation Board.
	C.	Equal Employment Opportunity Commission.
	D.	Council on Wage and Price Stability.

1 points

Question 32

Industry regulation includes approving:

	A.	prices.
	B.	a firm's exit from the market.
	C.	a firm's entry into the market.
	D.	all of the above.

1 points

Question 33

A firm's acquisition of another firm that is not a competitor, supplier, or distributor, is a:

	A.	horizontal merger.
	B.	interlocking directorate.
	C.	conglomerate merger.
	D.	vertical merger.

1 points

Question 34

If two buyers purchase the same product from the same seller with the same treatment and service, but pay different prices, then the seller is practicing:

	A.	price fixing.
	B.	price leadership.
	C.	price discrimination.
	D.	none of the above.

1 points

Question 35

When a buyer must purchase Good X in order to obtain Good Y, this is called:

	A.	an interlocking directorate.
	B.	price discrimination.
	C.	a tying contract.
	D.	a sole supplier contract.

1 points

Question 36

The regulatory philosophy that advocates profit incentives for regulated firms to operate more efficiently is:

	A.	free market regulation.
	B.	profit-push regulation.
	C.	incentive regulation.
	D.	reward-structured regulation.

1 points

Question 37

Which of the following agencies is NOT primarily engaged in social regulation?

	A.	The Food and Drug Administration.
	B.	The Consumer Product Safety Commission.
	C.	The Antitrust Division of the Department of Justice.
	D.	The Equal Employment Opportunity Commission.

1 points

Question 38

The overseeing by a government agency of several aspects of the operations of a group of firms, such as their pricing and quality of service, is a characteristic of:

	A.	social regulation.
	B.	antitrust enforcement.
	C.	special purpose regulation.
	D.	industry regulation.

1 points

Question 39

The act that amends the Clayton Act in regard to anti-competitive mergers and acquisitions is the:

	A.	Sherman Act.
	B.	Robinson-Patman Act.
	C.	Celler-Kefauver Act.
	D.	Federal Trade Commission Act.

1 points

Question 40

A decrease in government regulatory activity:

	A.	is referred to as deregulation.
	B.	occurred only once, during the early 2000s.
	C.	has never occurred in the history of the U.S. economy.
	D.	none of the above.

1 points

Question 41

A cooperative effort by two or more firms that is limited in scope, such as drilling for oil, is a:

	A.	joint venture.
	B.	trade association.
	C.	per se violation of the antitrust laws.
	D.	none of the above.

1 points

Question 42

Federal regulatory agencies and state regulatory agencies have jurisdiction over:

	A.	activities in interstate commerce and intrastate commerce, respectively.
	B.	exactly the same activities, which creates double regulatory control for all business activities.
	C.	completely separate industries; the federal government regulates 50% of all industries and state governments regulate the other 50%.
	D.	none of the above.

1 points

Question 43

Which of the following agencies is primarily engaged in social regulation?

	A.	The Antitrust Division.
	B.	The Environmental Protection Agency.
	C.	The Bureau of Competition of the Federal Trade Commission.
	D.	All of the above.

1 points

Question 44

A merger between Coca Cola and Microsoft would be:

	A.	a vertical merger.
	B.	a horizontal merger.
	C.	an interlocking directorate.
	D.	a conglomerate merger.

1 points

Question 45

A firm will sell product A to a buyer only if the buyer purchases product B from the firm as well. This arrangement is known as:

	A.	an across-the-board contract.
	B.	a conditional contract.
	C.	an enforcement contract.
	D.	a tying contract.

1 points

Question 46

The Robinson-Patman Act deals with:

	A.	interlocking directorates.
	B.	tying contracts.
	C.	price discrimination.
	D.	mergers and acquisitions.

1 points

Question 47

Cost-plus pricing is:

	A.	the main method for setting prices by firms in pure competition to allow the recovery of costs and a normal profit.
	B.	the most common form of social regulation found in the United States today.
	C.	a common type of price fixing arrangement that is condemned by the antitrust laws.
	D.	designed to generate revenues sufficient to cover reasonable operating costs and a fair return to investors in a regulated business.

1 points

Question 48

A firm's acquisition of a supplier or distributor is a:

	A.	conglomerate merger.
	B.	interlocking directorate.
	C.	horizontal merger.
	D.	vertical merger.

1 points

Question 49

Actions by a seller that prevent its suppliers or buyers from dealing with a competitor are:

	A.	territorial divisions.
	B.	exclusionary practices.
	C.	interlocking directorates.
	D.	price discrimination.

1 points

Question 50

A major problem with cost-plus pricing is that it:

	A.	forces a firm to operate where marginal cost equals marginal revenue.
	B.	is not designed to give a fair return to the investors in a business.
	C.	does not promote economic efficiency.
	D.	has been struck down as unconstitutional by the Supreme Court.

1 points

Question 51

Wages are determined by the interaction of supply and demand in:

	A.	resource markets.
	B.	the foreign sector.
	C.	product markets.
	D.	the government sector.

1 points

Question 52

Use the following table.

Reference: Ref 15-1

What will be the equilibrium wage in this labor market?

	A.	$16.
	B.	$8.
	C.	$20.
	D.	$12.

1 points

Question 53

In a competitive market for labor, the market demand curve for labor:

	A.	is downward sloping, and the market supply curve of labor is upward sloping.
	B.	is horizontal at the going market price, and the market supply curve of labor is upward sloping.
	C.	and the market supply curve of labor are both horizontal at the going market price.
	D.	and the market supply curve of labor are both downward sloping.

1 points

Question 54

The Law of Diminishing Returns states:

	A.	there is an inverse relationship between price and quantity demanded.
	B.	as additional units of a variable factor are added to a fixed factor, beyond some point each additional unit of the variable factor will add less to output than did the previous unit.
	C.	as additional units of a good are consumed, beyond some point each additional unit will add less satisfaction.
	D.	there is a direct relationship between price and quantity supplied.

1 points

Question 55

Marginal product is:

	A.	the change in total revenue when an additional unit of a variable input is added to the production process.
	B.	total product divided by total variable inputs.
	C.	the change in total product that results when an additional unit of a variable input is used.
	D.	the total output produced by all the variable inputs.

1 points

Question 56

As more labor is hired by a firm over the short run, the marginal product of each additional unit of labor will eventually decrease because of:

	A.	diseconomies of scale.
	B.	the Law of Diminishing Returns.
	C.	the decrease in the dollar value of labor's productivity since less is produced.
	D.	none of the above.

1 points

Question 57

The marginal revenue product of labor determines how many:

	A.	units of output will be sold at various prices.
	B.	dollars of profit will be earned.
	C.	workers will be hired.
	D.	firms will operate in the market.

1 points

Question 58

The demand curve for labor is based on workers' marginal:

	A.	product.
	B.	cost.
	C.	revenue.
	D.	revenue product.

1 points

Question 59

The supply curve for labor is:

	A.	vertical.
	B.	horizontal.
	C.	downward sloping.
	D.	upward sloping.

1 points

Question 60

Which of the following could cause a labor supply curve to shift?

	A.	Changes in immigration laws.
	B.	Changes in economic conditions.
	C.	Changes in labor market expectations.
	D.	All of the above.

1 points

Question 61

A change in the quantity supplied of labor would be caused by a change in:

	A.	wages.
	B.	immigration laws.
	C.	economic conditions.
	D.	demographic trends.

1 points

Question 62

A union that represents different types of workers in a particular plant or business firm is:

	A.	an industrial union.
	B.	a customs union.
	C.	a craft union.
	D.	a business union.

1 points

Question 63

Which of the following statements about collective bargaining is FALSE?

	A.	The bargaining process should begin only after a union has gone out on strike.
	B.	The bargaining process involves a give-and-take strategy by both sides.
	C.	The objectives bargained for by a union and management are largely economic.
	D.	The terms of a negotiated contract depend in large part on the relative bargaining ability and strength of the participating parties.

1 points

Question 64

The act that allows the president to establish an 80-day cooling-off period during which a particular strike or lockout cannot occur is the:

	A.	National Labor Relations Act.
	B.	Taft-Hartley Act.
	C.	Cool Off Act of 1950.
	D.	Esserman Act.

1 points

Question 65

Differences in the income from productive resources may be due to:

	A.	the quality of those resources.
	B.	how those resources are used.
	C.	the quantity of those resources owned.
	D.	all of the above.

1 points

Question 66

In recent years attention has focused on the plight of the homeless in the United States because:

	A.	they create a large drain on the Social Security system.
	B.	their lobbying has given them a disproportionate voice in the legislative process.
	C.	many of them receive no government aid since they do not qualify for specific programs, have no address, or do not sign up for benefits.
	D.	all of the above.

1 points

Question 67

Many of the homeless receive no government aid because they:

	A.	do not sign up for benefits.
	B.	do not qualify for specific programs.
	C.	have no address at which they can be reached.
	D.	all of the above.

1 points

Question 68

An individual firm's demand curve for labor is derived from the:

	A.	firm's marginal revenue product of labor.
	B.	market demand curve for labor.
	C.	demand curve for the firm's product.
	D.	firm's marginal product of labor.

1 points

Question 69

In a market system, wages are determined:

	A.	by the interaction of buyers and sellers of labor.
	B.	solely by the price at which a firm is willing to acquire labor.
	C.	by government wage guidelines.
	D.	solely by the price at which an individual is willing to sell their labor.

1 points

Question 70

A derived demand for factors of production means:

	A.	households derive income from factors of production they sell to businesses.
	B.	factors of production derive their value from government policies imposed on businesses.
	C.	the demand for factors of production depends on the demand for the product the factors produce.
	D.	the value of a product is determined by the value of the factors of production used.

1 points

Question 71

The labor demand curve for an individual firm is:

	A.	downward sloping because workers will supply more hours of labor at lower wage rates than at higher wage rates.
	B.	upward sloping because businesses are willing to pay higher wages to hire more workers.
	C.	downward sloping because the value of labor's productivity falls as more workers are hired.
	D.	perfectly horizontal because labor's productivity does not change as more workers are hired.

1 points

Question 72

As more workers are hired by a firm and diminishing returns set in:

	A.	the value of labor's productivity falls.
	B.	total revenue for the firm falls.
	C.	the total cost of labor falls.
	D.	the total product of labor falls.

1 points

Question 73

Marginal revenue product is:

	A.	the change in total revenue that results from the sale of output when an additional unit of a variable input is used.
	B.	the total revenue produced by variable inputs.
	C.	the change in total product that results when an additional unit of a variable input is added to the production process.
	D.	the change in total revenue from selling an additional unit of output.

1 points

Question 74

The Taft-Hartley Act:

	A.	is less supportive of organized labor.
	B.	gives workers the right to not join a union in some circumstances.
	C.	allows the President to call an 80-day cooling-off period in some labor situations.
	D.	All of the above.

1 points

Question 75

Right to work laws:

	A.	mandate collective bargaining in all states.
	B.	are state laws that prohibit union membership as a condition of employment.
	C.	establish an 80-day cooling-off period during which a particular strike or lockout cannot occur.
	D.	were created by the National Labor Relations Act.