Economic Multiple Questions
AmazingExpert
question.docx1.
In a decreasing cost industry, an increase in output will lead to
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a. |
an upward shift in the ATC curve. |
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b. |
an upward shift in the MC curve. |
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c. |
a reduction in long-run per-unit costs. |
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d. |
an increase in long-run per-unit costs. |
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5 points
Question 2
1.
In the above figure, if the firm is producing at Q3 and charging a price of P3, it should
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a. |
increase output and decrease price. |
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b. |
decrease output and increase price. |
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c. |
not change output or price. |
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d. |
shut down. |
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5 points
Question 3
1.
To be able to engage in profit-maximizing price searching, a monopoly firm must be able to
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a. |
prevent the entry of other firms into the market for its product. |
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b. |
induce the entry of other firms into the market for its product. |
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c. |
avoid earning negative economic profits in the short run. |
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d. |
always earn zero economic profits. |
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5 points
Question 4
1.
When marginal cost pricing occurs,
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a. |
price equals the additional cost society incurs in producing the next unit of an item. |
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b. |
the firm can only break even if it does not set price to marginal cost. |
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c. |
price equals average variable cost but exceeds average total cost. |
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d. |
the firm is at the shutdown point. |
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5 points
Question 5
1.
The portion of consumer surplus that no one in society is able to obtain in a situation of monopoly is known as
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a. |
a market externality. |
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b. |
a market failure. |
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c. |
an unrealized loss. |
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d. |
a deadweight loss. |
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5 points
In the above figure, the distance between A and B represents this monopoly firm's
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a. |
total profit. |
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b. |
total revenue. |
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c. |
average profit per unit. |
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d. |
average cost per unit. |
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5 points
Question 7
1.
Price discrimination is the
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a. |
refusal by a firm to sell to all customers. |
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b. |
selling of a given product at more than one price when the price differences reflect cost differences. |
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c. |
pricing of a product so that not everyone can afford it. |
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d. |
selling of a given product at more than one price when the price difference is unrelated to cost differences. |
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5 points
Question 8
1.
Compared to an efficient perfectly competitive industry, the monopolist will
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a. |
produce less output and charge a higher price. |
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b. |
produce more output at a lower price. |
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c. |
produce more output at a higher price and higher profit. |
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d. |
produce less output at a higher total cost. |
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5 points
Question 9
1.
A monopoly will maximize profits at the level of output where
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a. |
MR = AFC. |
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b. |
MR = MC. |
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c. |
MC = ATC. |
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d. |
MC = P. |
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5 points
Question 10
1.
Which of the following are barriers to entry?
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a. |
Economies of scale |
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b. |
Patents and copyrights |
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c. |
Control of resources |
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d. |
all of these |
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5 points
Question 11
1.
In order for a firm to receive monopoly profits, there must be
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a. |
homogeneous products. |
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b. |
free entry and exit to the market. |
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c. |
barriers to market entry. |
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d. |
mutual interdependence among firms. |
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5 points
Question 12
1.
The profit-maximizing monopolist will never operate in a price range where
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a. |
the demand curve slopes downward. |
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b. |
demand is inelastic. |
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c. |
P > MR. |
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d. |
P > MC. |
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5 points
Question 13
1.
According to the above figure, the profit-maximizing price for the monopolist is
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a. |
B. |
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b. |
C. |
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c. |
A. |
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d. |
D. |
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5 points
Question 14
1.
Suppose a monopolist's costs and revenues are as follows: ATC = $50.00; MC = $35.00; MR = $45.00; P = $55.00. The firm should
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a. |
increase output and decrease price. |
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b. |
decrease output and increase price. |
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c. |
not change output or price. |
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d. |
shut down. |
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5 points
Question 15
1.
The demand curve facing the monopoly is
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a. |
vertical. |
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b. |
horizontal. |
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c. |
downward sloping. |
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d. |
upward sloping. |
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5 points
Question 16
1.
If Japanese producers sell computer chips at a higher price in the United States than in Japan, and if there is no cost difference in producing or transporting the chips, the Japanese producers would be practicing
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a. |
cartel pricing. |
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b. |
price discrimination. |
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c. |
simple monopoly behavior. |
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d. |
price sampling. |
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5 points
Question 17
1.
If government regulations significantly increase the cost of operating within a particular market, one result is that
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a. |
new firms are discouraged from entering the market. |
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b. |
barriers to entry are nullified. |
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c. |
a perfectly competitive market environment is encouraged. |
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d. |
new firms are encouraged to enter the market. |
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5 points
Question 18
1.
A monopoly will look for opportunities to price discriminate because the practice
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a. |
leads to selling more units. |
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b. |
leads to greater profits. |
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c. |
allows it to charge higher prices. |
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d. |
is desired by customers. |
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5 points
Question 19
1.
According to the above figure, the maximum profit the monopolist can receive is
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a. |
$7,500 per day. |
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b. |
$9,000 per day. |
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c. |
$1,500 per day. |
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d. |
0. |
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5 points
Question 20
1.
Monopoly producers face
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a. |
No competitive producers of the same product. |
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b. |
Many competitors producing the same product. |
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c. |
At least one competitive producer of the same product. |
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d. |
Only a few competitors producing the same product. |
