exams question

2 points   

1.  For which of the following products would price discrimination be easiest?Answer orange juice diamonds compact disks haircuts gasoline

   2 points   

   Question 3
   1.  A nondiscriminating monopolist earning positive short-run economic profit determines that its current marginal cost is $15 and its current marginal revenue is $20. To maximize profit, a firm shouldAnswer raise price and increase output raise price and decrease output maintain a constant price and increase output reduce price and increase output shut down

      2 points   

      Question 4
      1.  If a perfectly competitive industry is monopolized, consumer surplusAnswer can be expected to decrease will usually remain constant can be expected to increase drops from a high value to zero increases from zero to a high value

         2 points   

         Question 5
         1.  A monopolist that engages in perfect price discriminationAnswer divides all buyers into two mutually exclusive groups refuses to sell to consumers of certain races, sexes, or creeds charges the same price for every unit sold charges a different price for every unit sold charges buyers who want a little of the good a low price and charges buyers who want a lot of the good a high price

            2 points   

            Question 6
            1.  For a monopolist, marginal revenue isAnswer equal to price greater than price less than price represented by a horizontal curve equal to average revenue

               2 points   

               Question 7
               1.  In the monopoly market structure, new firmsAnswer cannot profitably enter the industry, even in the long run may freely enter and leave the industry in both the short run and the long run may freely enter and leave the industry in the long run only may freely enter and leave the industry in the short run only have no incentive to enter the industry, even if economic profits are present

                  2 points   

                  Question 8
                  1.  The practice of charging different prices to different consumers of the same product is calledAnswer monopolistic pricing unit pricing price discrimination elasticity pricing marginal cost pricing

                     2 points   

                     Question 9
                     1.  A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers. What is a possible explanation for this failure?Answer There was nothing to prevent the students from reselling the fruit juice to other consumers. The fruit juice manufacturer produced in a perfectly competitive market. The two groups of consumers probably have the same demand elasticity for fruit juice. The cost of producing the product is relatively high. Demand for fruit juice is probably inelastic.

                        2 points   

                        Question 10
                        1.  A monopolist isAnswer one of a large number of small firms that produce a homogeneous good one of a small number of large firms that produce a differentiated good a single seller of a product with many close substitutes one of a small number of large firms that produce a homogeneous good a single seller of a product with no close substitutes

                           2 points   

                           Question 11
                           1.  In economics, products are considered "differentiated" only ifAnswer they are physically or chemically different sellers decide that they are different buyers think that they are different the government determines that they are different they are produced by different firms

                              2 points   

                              Question 12
                              1.  A firm will only earn normal profit in the long runAnswer if firms can freely enter or leave the market if firms do not try to maximize profit only if the industry is perfectly competitive whenever products are not differentiated if barriers to entry exist

                                 2 points   

                                 Question 13
                                 1.  Collusion occurs whenAnswer a firm chooses a level of output to maximize its own profit firms get together to maximize joint profits firms refuse to follow their price leaders firms petition their U.S. senators for favors two firms' price and output decisions come into conflict

                                    2 points   

                                    Question 14
                                    1.  The term monopolistic competitionAnswer is an alternate expression for monopoly is used to describe perfect competition with strong entry barriers denotes an industry with one seller of many differentiated products denotes an industry with many sellers of homogeneous products denotes an industry with many sellers of differentiated products

                                       2 points   

                                       Question 15
                                       1.  A monopolistically competitive firm can raise price somewhat due toAnswer product differentiation barriers to entry product similarity its homogeneous product high tariffs

                                          2 points   

                                          Question 16
                                          1.  What do monopolistic competition, pure monopoly, and perfect competition have in common?Answer free entry long-run economic profits differentiated product price taking the rule of profit maximization

                                             2 points   

                                             Question 17
                                             1.  Tacit collusion occurs in industries thatAnswer are monopolistically competitive contain price leaders experience rapid technological change are regulated produce very differentiated products

                                                2 points   

                                                Question 18
                                                1.  Under which of the following market conditions is it most difficult to maintain a cartel agreement?Answer There are many firms in the industry and these firms have similar costs. There are many firms in the industry and these firms have different costs. There are few firms in the industry and these firms have similar costs. There are few firms in the industry and these firms have different costs. There are many firms in the industry and these firms produce homogeneous products.

                                                   2 points   

                                                   Question 19
                                                   1.  Monopolistically competitive firms do not achieve allocative efficiency in the long run becauseAnswer marginal cost equals marginal revenue marginal cost is greater than marginal revenue marginal cost is less than marginal revenue price is less than marginal cost price is greater than marginal cost

                                                      2 points   

                                                      Question 20
                                                      1.  Which of the following is an example of an actual cartel?Answer the three largest cereal producers in the United States General Motors, Ford, and Chrysler the Organization of Petroleum Exporting Countries (OPEC) the three major U.S. cigarette manufacturers U.S. television networks -- ABC, NBC, CBS, and Fox