ECON 100 EXAM

Econ 100 Exam

virginia state university

 

QUESTION 1

1. A major characteristic of a monopoly is the ability of the monopolist to influence price.

 True

False

0.25 points   

QUESTION 2

1. The Herfindahl Index is calculated by summing the squares of the market shares of each firm in the industry.

 True

False

0.25 points   

QUESTION 3

1. Monopsonistic competition

		exists when there are many buyers offering differentiated conditions for sellers.
		is very prevalent in the U.S. economy.
		exists when a great number of firms hire labor, offering a variety of working conditions and fringe benefits.
		All of the above.

0.25 points   

QUESTION 4

1. In first degree price discrimination,

		each consumer pays the same price.
		all consumer surplus is captured by the seller.
		the seller separates the buyers into different groups.
		the seller charges different prices per unit for different quantities.

0.25 points   

QUESTION 5

1. The demand curve for the product of a monopolist is

		a straight horizontal line.
		identical to the market demand curve.
		identical to its MR curve.
		below its MR curve.

0.25 points   

QUESTION 6

1. The best example of an oligopolistic industry in the United States is

		gas stations.
		grocery stores.
		automobile production.
		farming.

0.25 points   

QUESTION 7

1. Under oligopolistic market conditions,

		the pricing actions of any one firm have no significant effect on the others.
		the pricing actions of any one firm have a significant effect on the others.
		no firm can have any control over its output price.
		all firms have identical prices for their products.

0.25 points   

QUESTION 8

1. Consumer surplus occurs whenever the consumer pays a price

		equal to marginal revenue.
		less than the consumer is willing to pay.
		less than marginal cost.
		equal to or less than average total cost.

0.25 points   

QUESTION 9

1. A firm is making a profit under conditions of monopolistic competition if, at the equilibrium output,

		AR is above MR.
		MR is above AR.
		AR is above AVC.
		AR is above ATC.

0.25 points   

QUESTION 10

1. The demand curve for the output of a perfectly competitive firm is

		perfectly inelastic.
		perfectly elastic.
		a rectangular hyperbola with an elasticity equal to 1.
		identical in shape to the market demand curve.

0.25 points   

QUESTION 11

1. Oligopoly is a market structure in which

		nonprice competition is seldom used.
		all producers are selling identical or similar products.
		there are many sellers with differentiated products.
		administered pricing is rarely practiced.

0.25 points   

QUESTION 12

1. Which of the following is the best example of a monopoly in the United States?

		the U.S. Postal Service.
		the aluminum industry.
		a government-regulated public utility.
		the automobile industry.

0.25 points   

QUESTION 13

1. Under which type of market structure is the firm’s pricing decision the most difficult?

		perfect competition
		monopoly
		monopolistic competition
		oligopoly

0.25 points   

QUESTION 14

1. Allocative efficiency occurs when firms are producing the goods consumers most want and consumers pay a price equal to marginal cost.

 True

False

0.25 points   

QUESTION 15

1. In perfect competition, no individual producer can influence price because

		each contributes an insignificant amount to total supply.
		they are ignorant of the market price.
		it is set by monopolists.
		it is regulated by the government.

0.25 points   

QUESTION 16

1. Game theory is a tool to analyze

		the pricing strategy in perfect competition.
		the price set by a monopoly.
		independence among firms.
		mutual interdependence among firms.

0.25 points   

QUESTION 17

1. The conditions for successful price discrimination include

		some ability for the firm to set the price.
		strong barriers segmenting markets.
		an inability for any customer to resell the product.
		All of the above.

0.25 points   

QUESTION 18

1. The greater the product differentiation,

		the more elastic a firm’s demand curve.
		the less elastic a firm’s demand curve.
		the less the price difference between competing firms.
		the closer to perfect competition.

0.25 points   

QUESTION 19

1. A market structure in which only one seller of a product exists is known as

		a monopoly.
		monopolistic competition.
		an oligopoly.
		perfect competition.

0.25 points   

QUESTION 20

1. Forces that cause long-run average cost to fall as output expands are known as

		returns to scale.
		scale efficiency.
		economies of scale.
		optimizing forces