11. ECO1050 u07q1 Question 11 (Points: 2) When compared to a purely competitive
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Question
11. ECO1050 u07q1 Question 11 (Points: 2)When compared to a purely competitive market, a single-price monopolist produces and charges what? (2 points).
1. It produces a larger output and charges a lower price.
2. It produces a smaller output and charges a higher price.
3. It produces a smaller output and charges a lower price.
4. It produces a larger output and charges a higher price.
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12. ECO1050 u07q1 Question 12 (Points: 3)
Suppose the grocery store market in Kansas City, Missouri, is perfectly competitive. Then, one store buys all the others and becomes a single-price monopoly. The figure above shows the relevant demand and cost curves. When the market is perfectly competitive, the quantity of steak is ____ pounds. When the market is a monopoly, the quantity of steak is ____ pounds. (3 points).
1. 4,000; 4,000.
2. 3,000; 2,000.
3. 2,000; 4,000.
4. None of the above answers is correct.
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13. ECO1050 u07q1 Question 13 (Points: 2)
What is rent seeking? (2 points).
1. The act of obtaining special treatment by the government to create an economic profit.
2. Selling a greater quantity than is profitable.
3. Charging a price below marginal cost.
4. Charging higher prices for an apartment.
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14. ECO1050 u07q1 Question 14 (Points: 2)
With price discrimination, a monopolist does the following. ____ its economic profit and ____ its output. (2 points).
1. Increases its economic profit and decreases its output.
2. Decreases its economic profit and increases its output.
3. Decreases its economic profit and decreases its output.
4. Increases its economic profit and increases its output.
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15. ECO1050 u07q1 Question 15 (Points: 2)
What does the total revenue test using the price elasticity of demand do? (2 points).
1. It explains why monopolies will only operate on the inelastic portion of their demand curves.
2. It helps regulators decide whether to use a marginal cost pricing rule or an average cost pricing rule.
3. It explains why monopolies will only operate on the elastic portion of their demand curve.
4. It determines whether a monopoly can perfectly price discriminate or not.
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16. ECO1050 u07q1 Question 16 (Points: 2)
This is a difference between a perfectly competitive industry and a monopoly. (2 points).
1. Perfectly competitive firms can have a public franchise.
2. In the long run, firms in a perfectly competitive industry earn a normal profit, and a monopoly can earn an economic profit.
3. A firm in a perfectly competitive industry can perfectly price discriminate, but a monopoly cannot.
4. Only monopolies have an incentive to maximize profit.
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17. ECO1050 u07q1 Question 17 (Points: 2)
What does monopolistic competition have in common with perfect competition? (2 points).
1. A standardized product.
2. Product differentiation.
3. The ability to earn an economic profit in the long run.
4. A large number of firms and freedom of entry and exit.
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18. ECO1050 u07q1 Question 18 (Points: 3)
What does monopolistic competition have in common with monopoly? (3 points).
1. The ability to collude with respect to price.
2. Mutual interdependence.
3. A large number of firms.
4. A downward-sloping demand curve.
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19. ECO1050 u07q1 Question 19 (Points: 3)
This is an example of a firm in monopolistic competition. (3 points).
1. Kansas Power and Light, the sole provider of electricity in Kansas City.
2. Your local water company.
3. The sole cable television company.
4. The many Chinese restaurants in San Francisco.
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20. ECO1050 u07q1 Question 20 (Points: 3)
Which of the following is correct? (3 points).
1. Perfect competition has a four-firm concentration ratio near zero.
2. Monopoly has a four-firm concentration ratio of 100.
3. Monopolistic competition has a four-firm concentration ratio of less than 40.
4. All of the above answers are correct.
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21. ECO1050 u07q1 Question 21 (Points: 3)
If the Herfindahl-Hirschman Index in the market for instant cameras equaled 10,000 in the 1970s, how as the instant camera industry best characterized at that time? (3 points).
1. A monopoly.
2. An oligopoly.
3. Perfect competition.
4. Monopolistic competition.
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22. ECO1050 u07q1 Question 22 (Points: 3)
Because firms in both monopolistic competition and perfect competition compete with many other firms, which is correct? (3 points).
1. P > MC = MR for firms in both perfect competition and monopolistic competition.
2. P = MC = MR for firms in perfect competition and P > MC = MR for firms in monopolistic competition.
3. P = MC for both types of firms.
4. MC = MR for firms in perfect competition and MR > MC for firms in monopolistic competition.
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23. ECO1050 u07q1 Question 23 (Points: 3)
Kevin owns a personal training gymnasium in Orlando, Florida. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. If Kevin trains five clients per day, what will happen? (3 points).
1. He will maximize his profit.
2. He will earn an economic profit but not the maximum profit.
3. He will have a positive marginal revenue, but he will incur an economic loss.
4. He will earn a normal profit.
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24. ECO1050 u07q1 Question 24 (Points: 2)
Why is a firm in monopolistic competition is similar to a firm in perfect competition? (2 points).
1. Because both can earn only a normal profit in the long run.
2. Because both maximize their profits by producing where P = MC = MR.
3. Because both can earn only a normal profit in the short run.
4. All of the above answers are correct.
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25. ECO1050 u07q1 Question 25 (Points: 3)
To maintain their economic profits, what must firms in monopolistic competition continually engage in? (3 points).
1. Lowering their product's price.
2. Raising their product's price.
3. Product innovation and development.
4. Realizing short-run losses.
Explanation / Answer
11. ECO1050 u07q1 Question 11 (Points: 2)
When compared to a purely competitive market, a single-price monopolist produces and charges what? (2 points).
2. It produces a smaller output and charges a higher price.
12. ECO1050 u07q1 Question 12 (Points: 3)
Suppose the grocery store market in Kansas City, Missouri, is perfectly competitive. Then, one store buys all the others and becomes a single-price monopoly. The figure above shows the relevant demand and cost curves. When the market is perfectly competitive, the quantity of steak is ____ pounds. When the market is a monopoly, the quantity of steak is ____ pounds. (3 points).
sorry no figure
13. ECO1050 u07q1 Question 13 (Points: 2)
What is rent seeking? (2 points).
4. Charging higher prices for an apartment.
Save Answer
14. ECO1050 u07q1 Question 14 (Points: 2)
With price discrimination, a monopolist does the following. ____ its economic profit and ____ its output. (2 points).
1. Increases its economic profit and decreases its output.
15. ECO1050 u07q1 Question 15 (Points: 2)
What does the total revenue test using the price elasticity of demand do? (2 points).
4. It determines whether a monopoly can perfectly price discriminate or not.
Save Answer
16. ECO1050 u07q1 Question 16 (Points: 2)
This is a difference between a perfectly competitive industry and a monopoly. (2 points).
1
2. In the long run, firms in a perfectly competitive industry earn a normal profit, and a monopoly can earn an economic profit.
17. ECO1050 u07q1 Question 17 (Points: 2)
What does monopolistic competition have in common with perfect competition? (2 points).
.
4. A large number of firms and freedom of entry and exit.
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18. ECO1050 u07q1 Question 18 (Points: 3)
What does monopolistic competition have in common with monopoly? (3 points).
1. The ability to collude with respect to price.
19. ECO1050 u07q1 Question 19 (Points: 3)
This is an example of a firm in monopolistic competition. (3 points).
4. The many Chinese restaurants in San Francisco.
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20. ECO1050 u07q1 Question 20 (Points: 3)
Which of the following is correct? (3 points).
4. All of the above answers are correct.
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21. ECO1050 u07q1 Question 21 (Points: 3)
If the Herfindahl-Hirschman Index in the market for instant cameras equaled 10,000 in the 1970s, how as the instant camera industry best characterized at that time? (3 points).
1. A monopoly.
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22. ECO1050 u07q1 Question 22 (Points: 3)
Because firms in both monopolistic competition and perfect competition compete with many other firms, which is correct? (3 points).
2. P = MC = MR for firms in perfect competition and P > MC = MR for firms in monopolistic competition.
3
23. ECO1050 u07q1 Question 23 (Points: 3)
Kevin owns a personal training gymnasium in Orlando, Florida. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. If Kevin trains five clients per day, what will happen? (3 points).
sorry no figure
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24. ECO1050 u07q1 Question 24 (Points: 2)
Why is a firm in monopolistic competition is similar to a firm in perfect competition? (2 points).
4. All of the above answers are correct.
Save Answer
25. ECO1050 u07q1 Question 25 (Points: 3)
To maintain their economic profits, what must firms in monopolistic competition continually engage in? (3 points).
3. Product innovation and development.
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