A bill pending before the Kansas State Legislature would prohibit private compan
ID: 1101332 • Letter: A
Question
A bill pending before the Kansas State Legislature would prohibit private companies from selling health insurance and make the state the single payer of health care bills. Private health insurance companies that have made above normal profits have spent large sums of money trying to prevent the legislature from passing this bill into law. This is an example of
collusion.
an externality.
government failure.
rent-seeking behavior.
Question 2
A firm earns an operating profit if
revenues exceed variable costs of production.
price is less than average variable costs of production.
revenues equal fixed costs.
price equals marginal cost.
Question 3
A monopolist suffers a loss if its ________ schedule is everywhere above its ________ schedule.
MC; AVC
ATC; Demand
ATC; MC
Demand; ATC
Question 4
A monopolist's supply curve is
the portion of the monopolist's average variable cost curve that lies above its marginal cost curve.
dependent on the monopolist's demand curve.
the portion of the monopolist's marginal cost curve that lies above its average variable cost curve.
independent of the monopolist's demand curve.
Question 5
An industry is in ________ if firms have an incentive to enter or exit in the ________ run.
equilibrium; short
equilibrium; long
disequilibrium; short
disequilibrium; long
Question 6
Dana spends $10,000 on remodeling a storefront that she then opens as a shoe store. Her business has not been very successful, and she needs an additional $3,000 to keep the shoe store open. Which of the following is TRUE?
The $3,000 represents her marginal costs of production.
The $10,000 Dana spent on remodeling is a fixed cost of her business.
The $3,000 Dana needs to keep the deli open represents her total fixed costs.
The $10,000 Dana spent on remodeling represents a part of the total variable cost of her business.
Question 7
For a perfectly competitive industry, an improvement in technology will cause
the industry short-run supply curve to shift to the right.
a movement down the short-run industry supply curve.
a movement up the short-run industry supply curve.
the industry short-run supply curve to shift to the left.
Question 8
From society's viewpoint, a monopolist produces too little because price is
less than marginal cost.
less than average cost
greater than marginal cost
greater than average cost.
Question 9
If the marginal cost curve is below the average variable cost curve, then
average variable cost is increasing.
average variable cost is constant.
marginal cost is increasing.
average variable cost is decreasing.
Refer to the information provided in Figure 13.3 below to answer the questions that follow.
10)
Refer to Figure 13.3. The marginal revenue of the fifth pound of cheese is
$6.
$3.
$24.
$1.
11)
Refer to Figure 13.3. The marginal revenue of the sixth pound of cheese is
-$1.
-$4.
$4.
$1.
12)
Refer to Figure 13.3. The firm's total revenue will be maximized at a price of
$6.
$4.
$5.
$8.
13)
Refer to Figure 13.3. The firm's marginal revenue will be positive at
prices between $4 and $8.
all prices.
prices below $5.
prices above $5.
collusion.
an externality.
government failure.
rent-seeking behavior.
Explanation / Answer
rent-seeking behavior revenues exceed variable costs of production ATC; MC dependent on the monopolist's demand curve disequilibrium; short The $10,000 Dana spent on remodeling is a fixed cost of her business the industry short-run supply curve to shift to the right. greater than marginal cost average variable cost is decreasing
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