Skip to document
Welcome to StudocuSign in to access the best study resources
Guest user
0followers
HomeMy LibraryAsk AI
  • You don't have any recent items yet.
My Library
  • You don't have any courses yet.
  • You don't have any books yet.
  • You don't have any Studylists yet.

BAM040 SAS#24 (Quiz 6) - Hfhff

Hfhff
Course

Accounting (ACC 156)

180 Documents
Students shared 180 documents in this course
Academic year: 2023/2024
Uploaded by:
Anonymous Student
This document has been uploaded by a student, just like you, who decided to remain anonymous.
University of Iloilo - PHINMA

Comments

Please sign in or register to post comments.

Students also viewed

Related documents

Preview text

SAS Module #

Name:_____________________________________________________________

_

Section: ____________

Schedule:_____________________________________

Permit number:

_______

Date:_______________

QUIZ # 6

Test I. True of False. Direction: Write the word TRUE if the statement is

correct, otherwise write the word FALSE before the

number.

  1. A legal barrier creates a natural monopoly. F

  2. A firm experiences economies of scale along a downward-sloping long-term average total cost curve

  3. A monopoly always charges all customers the same price

  4. For a single-price monopoly, marginal revenue exceeds price

  5. Marginal revenue is always positive for monopoly

  6. A single-price monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost

  7. A monopoly charges a higher price than a perfectly competitive industry

  8. A monopoly redistribute consumer surplus so that consumer gain and the producer loses

  9. The buyer of a monopoly always makes an economic profit

  10. Price discrimination lowers a firm’s profit

  11. Price discrimination converts producer surplus into consumer surplus

  12. With perfect price discrimination, the firm produces the efficient quantity of output and has a larger profit that it would if it did not ;price discriminate

  13. A firm in a monopolistic competition faces a downward-sloping demand curve

  14. The larger the four-firm concentration ratio. The more competitive the industry

  15. A firm in monopolistic competition can make an economic profit in the short run

  16. In a broader view of efficiency, monopolistic competition brings gains to consumers

  17. Firms in monopolistic competition innovate without regard to cost

  18. Firms in monopolistic often undertake extensive advertising

  19. Because advertising increase the demand for a firm’s product, increasing the amount of advertising shifts the firm’s cost curves downward

  20. Whether monopolistic competition is efficient depends on the value people place on product variety

  21. Oligopoly is a market in which a small number of

firms compete 22. The aim of a cartel is to lower price, increase output, and increase economic profit. F 23. In a duopoly, the highest price that the firms might set is the perfectly competitive price 24. A duopoly is currently making, in total, the same economic profit as a monopoly. If one firm increases its output, the economic profit of the other firm increases 25. A duopoly’s total profit is the largest when it produces more than the monopoly level of output 26. Products sold in purely competitive type of business are similar but not identical. F 27. In pure competition, firms have the power to determine the price of their product. F 28. It is difficult to enter in a purely competitive type of business because it requires a huge capitalization. F 29. Barriers to entries are considered obstacles when one decides to start his own business. T 30. Sellers in a purely competitive markets compete by quality only. F 31. An example of a purely competitive type of business are jeepneys with different routes. F 32. In monopolistic competition, products sold in the market are identical/homogeneous. F 33. Brand and mixture is an example of product differentiation in monopolistic competition. T 34. In monopolistic competition, consumers always prefer the price over brand or quality. F 35. If prices decrease in a purely competitive type of business, consumers should expect better product quality. F

Test II. Multiple Choice. Write the letter of your answer before the given number. USE CAPITAL LETTERS ONLY. 1. A monopoly market has A. a few firms B. A single firm C. two dominating firms in the market D. only two firms in it. 2. Two types of barriers to entry are called _____ barriers to entry and _____ barriers to entry A. legal; Illegal C. natural; illegal. B. natural; legal D. natural; rent seeking 3. A natural monopoly is one that arises from A. patent law B. Copyright law C. a firm buying all of a natural resource D. economies of scale 4. A legal barriers is created when a firm A. has economies of scale, which allow it to 1

SAS Module #

Name:_____________________________________________________________

_

Section: ____________

Schedule:_____________________________________

Permit number:

_______

Date:_______________

produce at a lower cost than two or more firms. B. is granted a public franchise, government license, patent, or copyright C. produces a unique product or service D. produces a standardized product or service.

  1. Pizza producers charge one price for single pizza and almost give away a second one. This is an example of A. Monopoly B. A barrier to entry C. behavior that is not profit-maximizing D. price discrimination

  2. For a single-price monopoly, price is A. greater than marginal revenue B. One half of marginal revenue C. equal to marginal revenue D. unrelated to marginal revenue

  3. A single-price monopoly can sell 1 unit for $9. To sell 2 units, the price must be $8 per unit. The marginal revenue from selling the second unit is A. $17 B. $17 C. $8 D. $8.

  4. When demand is elastic, marginal revenue is A. positive B. negative B. zero D. increasing as output increases

  5. To maximize its profit, a single-price monopoly produces the quantity at which A. the difference between the marginal revenue and marginal cost is as large as possible. B. marginal revenue equals equals marginal cost C. average total cost is at its minimum D. the marginal cost curve interacts the demand curve

  6. Once a monopoly has determined how much its produces, it will charge a price that A. is determined by the intersection of the marginal cost and average total cost curves. B. minimizes marginal cost C. is determined by its demand curve D. is independent of the amount produced

  7. If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly; the price will _____and the quantity will _____. A. Fall; decrease B. fall; increase C. rise; decrease D. rise; increase

  8. Figure 12 shows the market for gasoline in a

town. If the market is perfectly competitive, the price is

_____ per gallon and if the market is taken over by a firm that operates as a single-price monopoly, the price is _____. no answer/choices/BONUS A. $1; $2 B. $1; $3 C. $1; $1 D. $2; $

  1. Figure 12 shows the market for gasoline in a town. If the market is perfectly competitive, the quantity is _____ million gallon a year and if the market is taken over by a firm that operates as a single-price monopoly, the quantity is _____ in million gallons a year. A. 50; 20 B. 50; 30 C. 30; 20 D. 50; 10

  2. Comparing to single-price monopoly to perfect competition, monopoly A. increase the amount of consumer surplus B. has the same amount of consumer surplus C. has no consumer surplus D. decreases the amount of consumer surplus

  3. Is a single-price monopoly efficient? A. Yes, because it creates a deadweight loss B. No, because it creates a deadweight loss. C. Yes, because consumers gain and producers lose some of their surpluses D. Yes, because consumer lose and producers gain some of their surpluses

  4. Monopolies _____ fair and _____ efficient. A. Are always; are not B. might be; are always C. might be; might be D. are always; are always

  5. In equilibrium, rent seeking eliminates the A. Deadweight loss B. economic profit C. consumer surplus D. demand for the product

  6. Which of the following must a firm be able to do to successfully price discriminate? No answer/BONUS I. Divide buyers into different groups according to their willingness to pay II. Prevent resale of the goods or service III. identify into which group (high willingness to pay or low willingness to pay) a buyer belongs A. II only B. I and II C. I and III D. III only

  7. Which of the following is (are) price discrimination? I. Charging different prices based on differences in production cost II. Charging business flyers a higher airfare than tourists III. Charging more for the first pizza than the second A. I only B. II only C. II and III D. I and III

  8. When monopoly price discriminates, it A. Increases the amount of consumer surplus.

2

SAS Module #

Name:_____________________________________________________________

_

Section: ____________

Schedule:_____________________________________

Permit number:

_______

Date:_______________

earn an economic profit in the long run. C. dominated by fierce advertising campaigns. D. marked by firms continuously trying to change their products so that consumers prefer their product to their competitors' products.

  1. The exit of existing firms from a competitive market will A. decrease market supply and increase market prices. B. decrease market supply and decrease market prices. C. increase market supply and increase market prices. D. increase market supply and decrease market prices.

  2. In a perfectly competitive market, the process of entry or exit ends when A. firms are operating with excess capacity. B. firms are making zero economic profit. C. firms experience decreasing marginal revenue. D. price is equal to marginal cost.

  3. In economics, market power refers to the A. ability of a firm to influence the market price of the good it sells. B. ability of the market system to efficiently allocate scare goods. C. quality of a firm’s marketing efforts. D. forces that operate the “invisible hand.”

  4. A fundamental source of monopoly market power arises from A. availability of “free” natural resources, such as water or air. B. perfectly elastic demand. C. perfectly inelastic demand. D. barriers to entry.

  5. Authors are allowed to be monopolists in the sale of their books in order to A. satisfy literary advocacy groups that exercise their lobbying power. B. encourage authors to write more and better books. C. correct for the negative externalities that the internet and television impose. D. promote a society that thinks for themselves and learns from whichever books they please.

  6. The monopolist’s profit-maximizing quantity of output is where A. average cost equals marginal revenue. B. marginal cost equals marginal revenue. C. price equals marginal revenue. D. All of the above are correct.

  7. In which of the following industries do firms set prices? A. competitive markets, but not monopoly markets B. Monopoly markets, but not competitive markets C. competitive and monopoly markets D. neither competitive nor monopoly markets

  8. A price-taking firm A. cannot influence the price of the product it sells. B. talks to rival firms to determine the best price for all

of them to charge. C. sets the product's price to whatever level the owner decides upon. D. asks the government to set the price of its product. 42. One of the requirements for a monopoly is that A. the product cannot be produced by small firms. B. there are several close substitutes for the product. C. there is a unique product with no close substitutes. D. products are high priced. 43. An industry with a large number of firms, differentiated products, and free entry and exit is called A. oligopoly. B. monopoly. C. monopolistic competition. D. perfect competition. 44. In an industry with a large number of firms, A. collusion is impossible. B. one firm will dominate the market. C. each firm will produce a large quantity, relative to market demand. D. competition is eliminated. 45. All of the following are examples of product differentiation in monopolistic competition EXCEPT A. new and improved packaging. B. lower price. C. acceptance of more credit cards than the competition. D. location of the retail store. 46. Which of the following is NOT a valuable role of government in a free market society? A. To reduce negative externalities. B. To enhance rent-seeking activities. C. To reduce market power. D. To provide public goods. 47. Which of the following is true concerning negative externalities? A. Firms tend to produce more than the efficient level of output. B. Society gains because firms do not pay the external costs of production. C. Perfect competition is better than monopoly from the viewpoint of society even in the presence of negative externalities. D. With negative externalities, a monopoly will always produce an output level less than is socially efficient. 48. Which of the following is a public good? A. National defense B. Telephones C. Electricity D. All of the statements associated with this question are public goods. 49. In order to eliminate the inefficiency brought about by a monopoly, the government wants to impose a price ceiling on the monopoly. What is the optimal price to be imposed? A. The competitive price B. The competitive price, unless it is below ATC

4

SAS Module #

Name:_____________________________________________________________

_

Section: ____________

Schedule:_____________________________________

Permit number:

_______

Date:_______________

(Average Total Cost) C. The competitive price, unless it is below MR (Marginal Revenue) D. The competitive price, unless it is above ATC.

  1. Rent seeking: A. results in less market share for the rent seekers. B. involves lobbyists influencing government policies to benefit their interests. C. results in more negative externalities. D. None of the statements are correct.

“Rather failed with honor than succeed by fraud.”

5

Was this document helpful?

BAM040 SAS#24 (Quiz 6) - Hfhff

Course: Accounting (ACC 156)

180 Documents
Students shared 180 documents in this course

University: University of Iloilo - PHINMA

Was this document helpful?
BAM 040: Managerial Economics
SAS Module #24
Name:_____________________________________________________________
_
Section: ____________
Schedule:_____________________________________
Permit number:
_______
Date:_______________
QUIZ # 6
Test I. True of False.
Direction: Write the word TRUE if the statement is
correct, otherwise write the word FALSE before the
number.
1. A legal barrier creates a natural monopoly. F
2. A firm experiences economies of scale along a
downward-sloping long-term average total cost
curve.T
3. A monopoly always charges all customers the
same price.F
4. For a single-price monopoly, marginal revenue
exceeds price.F
5. Marginal revenue is always positive for
monopoly.F
6. A single-price monopoly maximizes profit by
producing the quantity at which marginal
revenue equals marginal cost.T
7. A monopoly charges a higher price than a
perfectly competitive industry.T
8. A monopoly redistribute consumer surplus so that
consumer gain and the producer loses.F
9. The buyer of a monopoly always makes an
economic profit.F
10. Price discrimination lowers a firm’s profit.F
11. Price discrimination converts producer surplus
into consumer surplus.F
12. With perfect price discrimination, the firm
produces the efficient quantity of output and has
a larger profit
that it would if it did not ;price discriminate.T
13. A firm in a monopolistic competition faces a
downward-sloping demand curve.T
14. The larger the four-firm concentration ratio. The
more competitive the industry.F
15. A firm in monopolistic competition can make an
economic profit in the short run.T
16. In a broader view of efficiency, monopolistic
competition brings gains to consumers.T
17. Firms in monopolistic competition innovate without
regard to cost.F
18. Firms in monopolistic often undertake extensive
advertising.T
19. Because advertising increase the demand for a
firm’s product, increasing the amount of advertising
shifts the firm’s cost curves downward.F
20. Whether monopolistic competition is efficient
depends on the value people place on product variety.T
21. Oligopoly is a market in which a small number of
firms compete.T
22. The aim of a cartel is to lower price, increase
output, and increase economic profit. F
23. In a duopoly, the highest price that the firms might
set is the perfectly competitive price.F
24. A duopoly is currently making, in total, the same
economic profit as a monopoly. If one firm increases its
output, the economic profit of the other firm increases.F
25. A duopoly’s total profit is the largest when it
produces more than the monopoly level of output.F
26. Products sold in purely competitive type of business
are similar but not identical. F
27. In pure competition, firms have the power to
determine the price of their product. F
28. It is difficult to enter in a purely competitive type of
business because it requires a huge capitalization. F
29. Barriers to entries are considered obstacles when
one decides to start his own business. T
30. Sellers in a purely competitive markets compete by
quality only. F
31. An example of a purely competitive type of business
are jeepneys with different routes. F
32. In monopolistic competition, products sold in the
market are identical/homogeneous. F
33. Brand and mixture is an example of product
differentiation in monopolistic competition. T
34. In monopolistic competition, consumers always
prefer the price over brand or quality. F
35. If prices decrease in a purely competitive type of
business, consumers should expect better product
quality. F
Test II. Multiple Choice. Write the letter of your
answer before the given number. USE CAPITAL
LETTERS ONLY.
1. A monopoly market has
A. a few firms
B. A single firm
C. two dominating firms in the market
D. only two firms in it.
2. Two types of barriers to entry are called _____
barriers to entry and _____ barriers to entry
A. legal; Illegal C. natural; illegal.
B. natural; legal D. natural; rent seeking
3. A natural monopoly is one that arises from
A. patent law
B. Copyright law
C. a firm buying all of a natural resource
D. economies of scale
4. A legal barriers is created when a firm
A. has economies of scale, which allow it to
1
This document and the information thereon is the property of PHINMA Education

Students also viewed

Related documents