End of Week Quiz Chapter 8 to 10

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Question #1

A successful advertising campaign may allow competing monopolists to

A increase its profits.

B charge a higher price.

C sell a greater quantity.

D do all of the above.

Question #2

____________ occurs when circumstances have allowed several large firms to have all or most of the sales in an industry.

A An oligopoly

B A cartel

C A monopoly

D Collusion

Question #3

The single most common form of competition in the U.S. is

A perfect competition among firms with differentiated products.

B oligopolistic competition in a certain market with similar products.

C monopolistic competition among firms with differentiated products.

D perfect competition because it displays product and allocative efficiencies.

Question #4

A monopolistically competitive industry does not display ____________ in either the short-run, when firms are making ____________, nor in the long-run, when firms are earning ____________.

A productive and allocative efficiency; profits and losses; negative profits

B productive and allocative efficiency; profits and losses; zero profits

C allocative efficiency; profits and losses; negative profits

D productive efficiency; profits and losses; zero profits

Question #5

If a monopoly or a monopolistic competitor raises their prices, the quantity demanded ____________.

A will expand

B will decline

C will decline in the short run

D stays the same

Question #6

In a monopolistic competitive industry, firms can try to differentiate their products by

A choosing optimal locations from which the product is sold.

B enhancing the intangible aspects of the product.

C creating optimal perceptions of the product.

D enhancing productâ€™s physical aspects and all of the above.

Question #7

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm’s ability to

A raise its price without losing all of its customers.

B lose fewer customers than a monopoly that raised its prices.

C choose any combination of price and quantity.

D sell any quantity it wishes at the prevailing market price.

Question #8

If monopolistic competitors must expect a process of entry and exit like perfectly competitive firms,

A they will wish to cooperate to make decisions about what quantity to produce.

B they will be unable to earn higher-than-normal profits in the short run.

C they will wish to cooperate to make decisions about what price to charge.

D they will be unable to earn higher-than-normal profits in the long run.

Question #9

_______________ law implies ownership over an idea or concept or image

A Patent

B Copyright

C Intellectual property

D Trademark

Question #10

Which of the following denotes the typical shape of the monopolist’s total cost curve?

A higher output levels create the typical downward sloping cost curve

B total costs are typically constant and are shown by a straight horizontal line

C total costs rise and grow steeper as output rises

D total costs decrease and become flatter as output rises

Question #11

Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?

A conditions of entry in a certain industry

B quantities that can be produced

C natural monopoly

D prices that can be charged

Question #12

For a pure monopoly to exist,

A there are limited sellers in a particular industry

B there are a few sellers in a given industry

C there is only one seller, therefore no industry

D there is a single seller in a particular industry

Question #13

If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3,90 per unit, it will produce and sell the sixth unit if its marginal cost is

A $3.50 or less

B $4.00 or less

C $3.90 or less

D $3.40 or less

Question #14

The marginal revenue curve for a monopolist _________ the market demand curve.

A always is the same

B always rises above

C always lies beneath

D always runs parallel

Question #15

Occasionally, _________ may lead to pure monopoly; in other market conditions, they may limit competition _________.

A barriers to entry; to a few oligopoly firms

B deregulation; requiring new copyright law

C barriers to entry; to a natural monopoly

D deregulation; requiring new patent law

Question #16

The US government has registered _________ on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily _________.

A 1 million copyright licenses; identify the authors of creative works

B 800,000 trademarks; identify the source of goods

C 200,000 trade secrets; create a natural monopoly

D 200,00 patents; license for use

Question #17

A natural monopoly occurs when the quantity demanded is _________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.

A greater than

B less than

C a or c above

D equal to

Question #18

Under perfect competition, any profit-maximizing producer faces a market price equal to its

A variable costs

B total costs

C marginal costs

D average costs

Question #19

If a competitive firm experiences a shift in costs of production that decreases marginal costs at all levels of output,

A producing less at any market price will off-set marginal cost .

B expanding output levels at any given price will be profitable.

C the firm’s marginal cost curve will shift to the left.

D the firm’s demand curve will also shift to the left.

Question #20

In the _______ , the perfectly competitive firm will react to profits by _____________________ .

A long run; increasing its production

B short run; increasing quality of products

C long run; tailoring their quality controls

D short run; reducing its labor inputs

Question #21

When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is

A considering opportunity costs.

B preparing to reach its shutdown point.

C considering capital investments.

D preparing to exit operations.

Question #22

Why would a profit-seeking firm need to tailor its decisions about the quantity of labor inputs that it purchases?

A to produce the highest profitable quantity of output at the lowest possible marginal cost

B to produce the profit-maximizing quantity of output at the lowest possible average cost

C deciding what quantity to produce is one of the major choices a profit-seeking firm makes

D the quantity of labor is the only variable cost choice a profit-seeking firm can make

Question #23

The term _______ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.

A price taker

B price setter

C business entity

D trend setter

Question #24

If the price that a firm charges is higher than its ___________ cost of production for that quantity produced, then the firm will earn profits.

A variable

B marginal

C average

D fixed

Question #25

In Sam’s greenhouse operation, labor is the only short term variable input. After completing a cost analysis, if the marginal product of labor is the same for each unit of labor, this will imply that

A the average product of labor is always greater that the marginal product of labor.

B the average product of labor is always less than the marginal product of labor.

C as more labor inputs are used, the average product of labor inputs will fall.

D the average product of labor is always equal to the marginal product of labor.

Question #26

If marginal cost is rising in a competitive firm’s short-run production process and its average variable cost is falling as output is increased, then

A marginal cost is below average variable cost.

B marginal cost is below average fixed cost.

C average fixed cost is constant.

D marginal cost is above average variable cost.

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End of Week Quiz Chapter 8 to 10

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