Econ 001 - Principles of Microeconomics » Summer 2019 » Quiz 10

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Question #1
For a pure monopoly to exist there is/are:
A.   only one seller, therefore no industry.
B.   a few sellers in a given industry.
C.   limited sellers in a particular industry.
D.   a single seller in a particular industry.
Question #2
Select all of the following examples that are considered monopolies:
A.   airlines
B.   U.S. postal service
C.   electric utility companies
Question #3
The largest cattle rancher in a given region will be unable to have a ________ when sufficient numbers of smaller cattle ranchers provide sources of competition.
A.   monopolistic competition
B.   monopoly
C.   oligopoly
Question #4
________ give(s) government the power to block certain mergers, and in some cases, to break up large firms into smaller ones.
A.   Market regulations
B.   Antitrust laws
C.   Restrictive practices
D.   Nationalization policies
Question #5
If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about:
A.   new ways of pleasing customers.
B.   the extent of competition.
C.   regulatory recapture.
D.   taking advantage of economies of scale.
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?
A.   The newly created firm will benefit consumers by operating more efficiently.
B.   Consumers can purchase better quality goods or services at a lower price.
C.   The newly created firm is able to take advantage of economies of scale.
Question #7
After AT&T was split up by government litigation into a number of different entities (i.e., local phone companies, a long-distance phone company and a phone equipment manufacturer), what was the result on competition in the phone market?
A.   Few companies dared to enter the market.
B.   AT&T’s residual monopolistic power persisted.
C.   An increase in competition leading to greater innovation, more services, and lower prices.
Question #8
Why can a price discriminating monopolist be both more profitable and more efficient (i.e., produce greater net benefits for society)?
A.   Because it charges a lower price than a single price monopolist.
B.   Because it is more socially conscious than a single price monopolist.
C.   Because it supplies a higher quantity of output than a single price monopolist.
Question #9
Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?
A.   Output will be too large and its price too low.
B.   Output will be too small and its price too high.
C.   Output will be too small and its price too low.
D.   Output will be too large and its price too high.
Question #10
Why is a monopoly allocatively inefficient?
A.   Because price is equal to marginal cost.
B.   Because price is greater than marginal cost at the profit-maximizing level of output.
C.   Because price is less than marginal cost.
Question #11
Which of the following are barriers to entry that are directly enforced by government?
A.   A permit required to conduct business operations.
B.   A well-respected brand name built up over many years.
C.   An established reputation for slashing prices in response to new entry.
Question #12
The slope of the demand curve for a monopoly firm is:
A.   upward sloping.
B.   downward sloping.
C.   horizontal, parallel to the x-axis.
D.   vertical, parallel to the y-axis.
Question #13
If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3,90 per unit, it will produce and sell the sixth unit if its marginal cost is:
A.   $4.00 or less.
B.   $3.50 or less.
C.   $3.90 or less.
D.   $3.40 or less.

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