Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Economics
Chapter 9
| Question | Answer |
|---|---|
| A monopoly differs from monopolistic competition in that | in a monopoly there are significant entry barriers but there are low barriers to entry in a monopolistically competitive market structure |
| Which of following is the best example of a monopoly if we use a broader definition of monopoly | Santos Tacos, the only taqueria in the small town of Santosville |
| Peet's Coffee and Teas produces some flavorful varieties of Peet's brand coffee. Is Peet's a monopoly? | No, although Peet's coffee is a unique product, there are many different brands of coffee that are very close substitutes |
| If we use a narrow definition of monopoly, then a monopoly is defined as a firm | that can ignore the actions of all other firms because it produces a product for which there are no close substitutes |
| A monopolist faces | a downward-sloping demand curve |
| A monopoly is characterized by all of the following except | there are only a few sellers, each selling a unique product |
| Few firms in the United States are monopolies because | when a firm earns profits, other firms will enter its market |
| Unlike a perfect competitor, a monopolist faces the market demand curve | True |
| A monopoly is a firm that is the only seller of a good or service that does not have a close substitute | True |
| A monopoly is a seller of a product | without a close substitute |
| An example of a monopoly based on control of a key resource is | Major League Baseball |
| Which one of the following about a monopoly is false? | A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly |
| One reason patent protection is vitally important to pharmaceutical firms is | the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process |
| What is the difference between a public franchise and a public enterprise | A public franchise grants a firm the right to be the sole legal provider of a good or service. A public enterprise refers to a service that is provided directly to consumers through the government |
| To maintain a monopoly, a firm must have | an insurmountable barrier to entry |
| The Aluminum Company of America (Alcoa) had a monopoly until the 1940s because | it had control of almost all the available supply of bauxite |
| In a natural monopoly, throughout the range of market demand | marginal cost is below average total cost and pulls average total cost downward |
| There are several types of barriers to entry that can create a monopoly. Which of the following barriers is the result of government action | Public Franchise |
| Governments grant patents to encourage | research and development on new products |
| Governments grant patents to | compensate firms for research and development costs |
| Number of Workers Mushrooms per Day (pounds) 1 12 2 30 3 45 4 50 5 54 6 56 What is the marginal product of the 4th worker | 5 pounds |
| Marginal cost is equal to the | change in total cost divided by the change in output |
| The marginal product of labor is defined as | the additional output that results when one more worker is hired, holding all other resources constant |
| The law of diminishing marginal returns states | that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline |
| When a firm produces 50,000 units of output, its total cost equals $6.5 million. When it increases its production to 70,000 units of output, its total cost increases to $9.4 million. Within this range, the marginal cost of an additional unit of output is | $145 |
| The change in a firm's total cost from producing one more unit of a good or service is | the definition of marginal cost |
| Which of the following statements is false? | Marginal cost will equal average total cost when marginal cost is at its lowest point |
| Marginal cost is the | additional cost of producing an additional unit of output |
| Which of the following explains why the marginal cost curve has a U shape | Initially, the marginal product of labor rises, then falls |
| If the marginal cost curve is below the average variable cost curve, then | average variable cost is decreasing |
| If the average variable cost curve is above the marginal cost curve, then | marginal costs can be either increasing or decreasing |
| Average variable cost can be calculated using any of the formulas below except | Δ(TC - FC)/ΔQ |
| Which of the following is true at the output level where average total cost is at its minimum | Marginal cost equals average total cost |
| Average total cost is equal to | total cost divided by the level of output |
| The shape of the average total cost curve is determined by the shape of | the marginal cost curve |
| As output increases | the difference between average total cost and average variable cost decreases |
| The fixed cost of an online course is relatively ________, but after the courses are placed online, the marginal cost of providing instruction to an additional student is ________. | high; low |
| When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is | $50 |
| Which of the following costs will not change as output changes? | total fixed cost |
| A monopolist's demand curve is the same as the marginal revenue curve for the product | False |
| If a theatre company expects $250,000 in ticket revenue from five performances and $288,000 in ticket revenue if it adds a sixth performance, the | marginal revenue of the sixth performance is $38,000. |
| A monopoly firm's demand curve | is the same as the market demand curve |
| If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then | to maximize profit the firm should continue to produce the output it is producing |
| The demand curve for a monopoly's product is | the market demand for the product |
| Relative to a perfectly competitive market, a monopoly results in | a gain in producer surplus less than the loss in consumer surplus |
| If a firm's average total cost is less than price where MR = MC | the firm should continue to produce the output it is producing |
| A profit maximizing monopoly's price is | greater than the price that would prevail if the industry was perfectly competitive |
| A monopolist's profit-maximizing price and output correspond to the point on a graph | where marginal revenue equals marginal cost and charging the price on the market demand curve for that output |
| The Clayton Act prohibited | any merger if its effect was to substantially lessen competition or create a monopoly |
| A Herfindahl-Hirschman Index is calculated by | summing the squares of the market shares of each firm in the industry |
| The lawsuit the Justice Department brought against Apple regarding the pricing of e-books for its iPad is an example of attempts by the government | to keep firms from artificially restricting competition to raise prices |
| A merger between the Ford Motor Company and General Motors would be an example of a | horizontal merger |
| A merger between U.S. Steel and General Motors would be an example of a | vertical merger |
| Collusion is | an agreement among firms to charge the same price or otherwise not to compete |
| The first important federal law passed to regulate monopolies in the United States was the | Sherman Act |
Created by:
annalise123