Question 1 (1 point)

What is most likely to occur if a monopoly engages in perfect price discrimination?

Question 1 options:

1)	It will eliminate consumer surplus.

2)	It will maximize consumer surplus.

3)	It will eliminate producer surplus.

4)	It will erode its own market power.

Question 2 (1 point)

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What market structure exists when an individual firm sees its individual demand curve as a flat line at the market price?

Question 2 options:

1)

monopoly.

2)	monopolistic competition.

3)	perfect competition.

4)	oligopoly.

Question 3 (1 point)

In a prisoner's dilemma involving two individuals, how can the Nash equilibrium best be described?

Question 3 options:

1)	neither individual confesses.

2)	both individuals confess.

3)	one confesses and the other does not.

4)	neither individual follows a dominant strategy.

Question 4 (1 point)

What situation results when a price ceiling equal to the firm's lowest average total cost is imposed on a monopoly?

Question 4 options:

1)	the firm creates a surplus.

2)	the firm loses all economic profit.

3)	the firm enhances its market power.

4)	the firm begins to no longer cover all of its costs.

Question 5 (1 point)

What action should be taken by individual OPEC members to produce results that would be in the best interest of the entire OPEC membership?

Question 5 options:

1)	restrict yearly output and keep prices high.

2)	maximize yearly petroleum output.

3)	engage in product differentiation.

4)	reach a non-cooperative equilibrium.

Question 6 (1 point)

What is a common strategy taken by many firms within an oligopolistic market structure?

Question 6 options:

1)	each play the tit for tat strategy.

2)	all have the same product.

3)	all will agree to not complete with one another.

4)	each firm will attack its competitor unethically.

Question 7 (1 point)

What can be assumed to have happened to the market structure of a firm that produces the same products as other firms in the industry when the firm suddenly distinguishes its products with unique features?

Question 7 options:

1)	the firm shifted from a monopolistic competitive to a perfectly competitive market structure.

2)	the firm shifted from a monopolistic competitive to an oligopolistic market structure.

3)	the firm shifted from a perfectly competitive to a monopolistic competitive market structure.

4)	the firm shifted from an oligopolistic to a perfectly competitive market structure.

Question 8 (1 point)

What is the main goal of a monopolistically competitive firm?

Question 8 options:

1)	maximize their profits.

2)	maximize their reputation.

3)	create a distinctive brand.

4)	minimize average total cost.

Question 9 (1 point)

What kind of firm sees a graph of its own demand as the entire downward sloping to the right demand curve of the industry?

Question 9 options:

1)	monopoly firm.

2)	monopolistically competitive firm.

3)	perfectly competitive firm.

4)	oligopolistic firm.

Question 10 (1 point)

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What term describes the situation in which a monopoly charges different prices to different customers based on each customer's price elasticity of demand?

Question 10 options:

1)	price manipulation.

2)	price fixing.

3)	price discrimination.

4)	price ceiling.

Question 11 (1 point)

Why would a natural monopoly, like a county water and sewer system, be operated by a government?

Question 11 options:

1)	to increase the deadweight loss.

2)	to create an efficient outcome.

3)	to protect consumer interests.

4)	to decrease demand for the good.

Question 12 (1 point)

Considering the price effect and the quantity effect, what is likely to happen to marginal revenue when a monopoly lowers its price to attract more customers?

Question 12 options:

1)	marginal revenue will be greater than the new price.

2)	marginal revenue will be equal to the new price.

3)	marginal revenue will be less than the new price.

4)	marginal revenue will remain unchanged after the new price.

Question 13 (1 point)

What assumption underlies the prisoner's dilemma game as a model of the behavior of firms within an oligopoly?

Question 13 options:

1)	each firm is looking to act in their best interest.

2)	each firm will aim to cooperate.

3)	each firm will aim to complete with one another.

4)	each firm will aim to copy one another.

Question 14 (1 point)

In the long run, as new competitors infringe on the monopolistically competitive firm's market, how is this likely to be displayed on the monopolistically competitive firm's graph?

Question 14 options:

1)	supply curve shifts to the right.

2)	supply curve shifts to the left.

3)	demand curve shifts out to the right.

4)	demand curve shifts in to the left.

Question 15 (1 point)

Why does a monopoly come into existence?

Question 15 options:

1)	a lack of technical advancements in the industry.

2)	government intervention forcing a price ceiling.

3)	the existence of significant barriers to entry in the industry.

4)	significant tax increases.

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