1) Suppose that Book-Cost Busters (BCB), without authorization, reproduced a
best-selling novel and placed it for downloading on the BCB pay-for-use website. This
action would violate the publisher’s:
A.profit rights.
B.patent.
C.copyright.
D.trademark.
2) The Patient Protection and Affordable Care Act (PPACA) was signed into law by:
A.President G. H. Bush
B.President Clinton
C.President G. W. Bush
D.President Obama
3) Mergers of firms in an industry tend to:
A.Transform monopolistic competition into pure competition
B.Transform monopolistic competition into oligopoly
C.Reduce the Herfindahl index for the industry
D.Break up an oligopoly
4)
Refer to the diagrams. The case of complementary goods is represented by figure:
A.A
B.B
C.C
D.D
5)
Refer to the above table. How many units of the resource would the profit-maximizing
firm use if the price of the resource was $18.00?
A.1
B.2
C.3
D.4
6)
Refer to the game theory matrix where the numerical data show the profits resulting
from alternative combinations of advertising strategies for Ajax and Acme. Ajax’s
profits are shown in the upper right part of each cell; Acme’s profits are shown in the
lower left. With collusion and no cheating, the outcome of the game is cell:
A.A
B.B
C.C
D.D
7) Industrially advanced countries can best help developing countries by:
A.Establishing price supports for the products produced by DVCs
B.Increasing tariffs and quotas on products produced by DVCs
C.Increasing the flows of private capital to DVCs
D.Increasing control over DVCs’ capital markets
8) One explanation for the existence of an increasing-cost industry is:
A.Increasing marginal returns to labor occur
B.Firms produce beyond the point of minimum long-run average total costs
C.Perfectly elastic long-run supply schedules are observed in the industry
D.As the industry expands, prices are bid up for some factors of production
9) Because the monopolist’s demand curve is downsloping:
A.MR will equal price.
B.price must be lowered to sell more output.
C.the elasticity coefficient will increase as price is lowered.
D.its supply curve will also be downsloping.
10) An oligopoly producing a homogeneous product is composed of three firms that act
like a cartel. Assume that these three firms have identical cost schedules. Assume also
that if any one of these firms sets a price for the product, the other two firms charge the
same price. As long as they all charge the same price they will share the market equally;
and the quantity demanded of each will be the same.
Below are the total-cost schedule of one of these firms and the demand schedule that
confronts it when the other firms charge the same price as this firm. Complete the
marginal-cost and marginal-revenue schedules facing the firm.
(a)What price would be charged, what output would be produced, and what profit
would be made by this firm?
(b)If the firms collude to maximize joint profits, what would be the industry price,
output, and profit?
11) Which is not a commonly heard argument for protectionism?
A.A strong national defense requires that some military products be produced
domestically
B.Infant industries need short-term protection from foreign competition in order to
grow
C.Specialization along the lines of comparative advantage can lead to some economic
instability in a nation
D.When other nations’ economies grow they typically import fewer goods and services
12) In an oligopolistic market there are:
A.Many buyers
B.Few buyers
C.Few sellers
D.Many sellers
13) Total utility is best defined as the:
A.Change in marginal utility multiplied by the price of a product
B.Maximum amount of satisfaction from consuming a product
C.Total satisfaction received from consuming a given amount of a product
D.Additional satisfaction received from consuming one more unit of a product