Question 1

Natural monopolies are usually found in industries with

Select one:

a.

low fixed costs.

b.

large economies of scale.

c.

a normal profit.

d.

constant economies of scale.

Question 2

Which of the following is not a potential source of monopoly?

Select one:

a.

patents

b.

economies of scale

c.

competitive tactics

d.

civil rights

Question 3

The demand curve for the product of a monopolist is

Select one:

a.

a straight horizontal line.

b.

identical to the market demand curve.

c.

identical to its MR curve.

d.

below its MR curve.

Question 4

In second degree price discrimination, each customer is charged a different price.

Select one:

a.

true

b.

false

Question 5

Which of the following is the best example of a monopoly in the United States?

Select one:

a.

the U.S. Postal Service.

b.

the aluminum industry.

c.

a government-regulated public utility.

d.

the automobile industry.

Question 6

The maximum profit of a monopolist occurs

Select one:

a.

where AR equals MC.

b.

at the lowest point of the MC curve.

c.

where MR equals MC.

d.

at the widest gap between AR and MC.

Question 7

If a firm in monopolistic competition is neither making a profit nor suffering a loss, its AR curve is

Select one:

a.

horizontal.

b.

touching its AVC curve.

c.

touching its ATC curve.

d.

below its MR curve.

Question 8

Game theory is a tool to analyze

Select one:

a.

the pricing strategy in perfect competition.

b.

the price set by a monopoly.

c.

independence among firms.

d.

mutual interdependence among firms.

Question 9

The first act to declare monopolies illegal in the United States was the

Select one:

a.

Sherman Antitrust Act.

b.

Clayton Act.

c.

Federal Trade Commission Act.

d.

Robinson-Patman Act.

Question 10

The demand curve for the output of an individual firm in monopolistic competition is

Select one:

a.

more elastic than the market demand curve.

b.

less elastic than the market demand curve.

c.

equivalent to the market demand curve.

d.

perfectly elastic.

Question 11

Perfect competition always provides a lower price than monopolistic competition or an oligopoly.

Select one:

a.

true

b.

false

Question 12

Selling at unreasonably low prices in order to destroy competing firms is known as

Select one:

a.

administered pricing.

b.

price discrimination.

c.

collusive practices.

d.

predatory pricing.

Question 13

The U.S. noninstitutional population excludes

Select one:

a.

members of the resident armed forces.

b.

all students under the age of 18.

c.

persons in prisons and medical institutions.

d.

All of these.

Question 14

Most of the unemployment experienced during the Great Depression was

Select one:

a.

cyclical.

b.

structural.

c.

seasonal.

d.

functional.

Question 15

If workers are changing jobs voluntarily and it takes a while for them to find new jobs, they are an example of

Select one:

a.

structural unemployment.

b.

frictional unemployment.

c.

technological unemployment.

d.

None of these.

Question 16

Most illegal immigrants are found in occupations

Select one:

a.

that require licenses.

b.

that require two years of college.

c.

that require certificates.

d.

that require little formal education.

Question 17

Which type of unemployment is the most difficult to cure?

Select one:

a.

functional

b.

seasonal

c.

cyclical

d.

structural

Question 18

Since 1970, U.S. union membership has

Select one:

a.

increased as a percentage of the labor force.

b.

declined as a percentage of the labor force.

c.

remained stable as a percentage of the labor force.

d.

become more restrictive.

Question 19

The group with the highest incidence of poverty in 2010 was

Select one:

a.

women living in a household with no husband present.

b.

blacks.

c.

Hispanics.

d.

people under age 18.

Question 20

If a Lorenz curve were constructed for the distribution of wealth, the curve would

Select one:

a.

indicate greater inequality for wealth than income.

b.

indicate less inequality for wealth than income.

c.

be identical to the Lorenz curve for income.

d.

be a straight line from the origin.

Question 21

Unemployment insurance is a form of in-kind transfer payment to reduce poverty.

Select one:

a.

true

b.

false

Question 22

The curve that indicates how far actual income distribution differs from a perfectly equal income distribution is called the

Select one:

a.

Lorenz curve.

b.

Garibaldi curve.

c.

GDP.

d.

Herfindahl Index curve.

Question 23

A minimum wage rate job raises a family out of poverty.

Select one:

a.

true

b.

false

Question 24

If a single household received all income, the Gini coefficient would

Select one:

a.

have a value of zero.

b.

be identical to the Lorenz distribution.

c.

have a value of 1.

d.

have a value of infinity.

Question 25

The goods and services included in GDP are allocated to which of the following four major sectors?

Select one:

a.

consumption, investment, government purchases, and transfer payments.

b.

consumption, taxes, saving, and transfer payments.

c.

investment, government purchases, net exports, and military goods.

d.

consumption, investment, government purchases, and net exports.