1.Suppose that a monopolist was selling 20 units at $50 each but has now reduced the price to $48 and is now selling 21 units. What is the monopolist's marginal revenue?

Select one:

a. $48.

b. $50.

c. $8.

d. $1,000

2.A firm will not shut down in the short run so long as it is covering its variable costs.

Select one:

True

False

3.Suppose that a consumer has a budget of $100 and the price of a CD is $20, while a movie costs $10. If movies are measured on the vertical axis, what is the slope of the budget line?

Select one:

a. -4

b. 1/2

c. -1/2

d. 4

e. 2

4.When producing a good generates externalities, the private market for that good tends to produce too:

Select one:

a. much of the product at too low a price

b. little of the product at too low a price

c. much of the product at too high a price

d. little of the product at too high a price

5.Minimum wage legislation is an example of price ceiling.

Select one:

True

False

6.A fair-return price is a price set equal to a firm's lowest average cost.

Select one:

True

False

7.A budget line shows various combinations of two goods you can buy with limited income that provide the same level of satisfaction.

Select one:

True

False

8.The right size of firm is determined by the minimum point on its short-run average cost curve.

Select one:

True

False

9.Suppose that the concentration ratio of an industry is high. Which of the following statements would be correct?

Select one:

a. Increasing returns to scale are significant for the firms within the industry.

b. All the firms must be of a similar size.

c.The firms within the industry will have all achieved their minimum efficient scale.

d. Increasing returns to scale are insignificant for the firms within the industry.

e. The industry will have many firms within it.

10.Some commentators have suggested that the Canadian film industry needs government assistance to allow it to compete with Hollywood. Which argument against free trade is being suggested?

Select one:

a. The comparative-protection argument

b. The infant-industry argument

c. The strategic-industry argument

d. The cultural-identity argument