QUESTION 1

Which of the following is most likely to be a monopoly?

1. local fast-food restaurant
2. local electricity distributor
3. local bathroom fixtures shop
4. local television broadcaster

5 points

QUESTION 2

A firm that holds a monopoly position in the marketplace is

1. a price maker
2. a price taker
3. monopolistically competitive
4. subject to infinite market forces

5 points

QUESTION 3

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

1. Collusion
2. A monopoly
3. An oligopoly
4. A cartel

5 points

QUESTION 4

A ___________ exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve.

1. natural monopoly
2. monopoly
3. oligopoly
4. monopolistic competition

5 points

QUESTION 5

What qualities would ideally suit a monopolistic firm with regard to barriers to entry?

1. A few impediments to limit new firms from operating and expanding within the market.
3. Sufficient strength to prevent or discourage potential competitors from entering the market.
4. Government rules on prices, quantities, or conditions of entry in an industry.
6. Government regulations that provide no barriers to entry, exit, or competition.

5 points

QUESTION 6

If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely be the focus of the arguments that they will present in favor of the merger?

1. Consumers can purchase better quality goos or services at a lower price.
2. The newly created firm is able to take advantage of economies of scale.
3. The newly created firm could eliminate duplicative investments.
4. The new firm will produce more efficiently and all of th above.

5 points

QUESTION 7

In the competitive market for figure skate blades, manufacturers offer an array of products that are

1. distinctly different in a particular way.
2. distinctly similar in a particular way.
3. virtually identical on the competition spectrum.
4. at opposite ends of the competition spectrum.

5 points

QUESTION 8

A monopolist is able to maximize its profits by

1. setting the price at the level that will maximize its per-unit profit.
2. producing output where MR = MC and charging a price along the demand curve.
3. setting output at MR = MC and setting price at the demand curve's highest point.
4. producing maximum output where price is equal to its marginal cost.

5 points

QUESTION 9

Government _____________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for _______________.

1. patent; a limited time
2. trademark; an unlimited time
3. copyright; a limited time
4. trade secret; an unlimited time

5 points

QUESTION 10

Government policy-makers often must decide how to balance the potential benefits of _____________ against the potential benefits of _______________.

1. competition; nationalization
2. corporate size; competition
3. corporate size; predatory pricing
4. nationalization; privatization

5 points

QUESTION 11

If the CEO of I'MaBigBank is playing prisoner's dilemma then, from his perspective, the gains to be had from cooperation are

1. larger than the payoffs that will be received.
2. smaller the the payoffs that will be perceived.
3. smaller than the rewards from pursuing self-interest.
4. larger than the rewards from pursuing self-interest.

5 points

QUESTION 12

What role does the US government play with respect to market competition?

1. Policing anticompetitive behavior and prohibiting contracts that restrict competition.
2. Preserving competition by regulating price and/or quantity of output.
3. Intervening in the price and output decision of businesses.
4. Maintaining abundant government-owned firms to ensure consumer friendly pricing.

5 points

QUESTION 13

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to

1. match price increase, but not price cuts.
2. stand at opposite ends of the competition spectrum.
3. match price cuts, but not price increases.
4. stand at the high point of the competition spectrum.

5 points

QUESTION 14

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is

1. oligopoly collusion.
2. prisoner's dilemma.
3. game theory.
4. collusion theory

5 points

QUESTION 15

Which of the following is most unlikely to present a barrier to entry into a market?

1. market forces
2. patent laws
3. technological advantages
4. deregulation

5 points

QUESTION 16

In the event that Only1Corp. obtains control of all the natural gas producers in the US, it would most likely

1. have a patent giving it exclusive legal rights to make, use, and sell for a limited time.
2. raise prices, cut production, and realize positive economic profits.
3. have legal protection to prevent copying its methods of production for commercial use.
4. acquire rights for its investors to produce and sell their product.

5 points

QUESTION 17

The use of sharp, temporary price cuts as a form of ________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers.

1. natural monopoly
2. monopolistic competition
3. predatory pricing
4. oligopolistic competion

5 points

QUESTION 18

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

1. barriers to entry; to a few oligopoly firms
2. barriers to entry; t o a natural monopoly
3. deregulation; requiring new patent law
4. deregulation; requiring new copyright law

5 points

QUESTION 19

The four-firm __________ measures the percentage share of the total sales in the industry that is accounted for by the largest four firms.

1. coordination ratio
2. market share ratio
3. concentration ratio
4. production ratio

5 points

QUESTION 20

In order to analyze the effects of a particular business merger, economists typically measure whether the competitive change has

1. helped consumers.
2. hurt comsumers.
3. made much difference.
4. All of the above.