Ch.25 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. Under monopolistic competition entry to the industry is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. The book publishing, furniture, and clothing industries are each illustrations of:   (4 points)

    a.  
    b.  
    c.  
    d.  

  3. A monopolistically competitive industry combines elements of both competition and monopoly. The monopoly element results from:   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. In comparing the demand curve of a pure monopolist with that of a monopolistically competitive firm, we would expect the monopolistic competitor to have a:   (4 points)

    a.  
    b.  
    c.  
    d.  

  5. In long-run equilibrium a monopolistically competitive firm will:   (4 points)

    a.  
    b.  
    c.  
    d.  




  6. The monopolistically competitive firm shown in the above figure:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. In long-run equilibrium monopolistic competition entails:   (4 points)

    a.  
    b.  
    c.  
    d.  

  8. Which of the following statements concerning a monopolistically competitive industry is correct?   (4 points)

    a.  
    b.  
    c.  
    d.  

  9. Answer the next question(s) on the basis of the following demand and cost data for a specific firm:



    If columns (1) and (3) of the demand data shown above are this firm's demand schedule, the profit-maximizing level of output will be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  10. The more elastic a monopolistic competitor's long-run demand curve, the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. Which of the following is the best example of oligopoly?   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. Differentiated oligopoly exists where a small number of firms are:   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because:   (4 points)

    a.  
    b.  
    c.  
    d.  



  14. Refer to the above profits-payoff table for a duopoly. If initially firms X and Y are charging $5 and $4 respectively:   (4 points)

    a.  
    b.  
    c.  
    d.  





  15. Refer to the above diagram for a noncollusive oligopolist. We assume that the firm is initially in equilibrium at point E where the equilibrium price and quantity are P and Q. If the firm's rivals will ignore any price increase but match any price reduction, over what range might marginal cost rise without disturbing equilibrium price and output?   (4 points)

    a.  
    b.  
    c.  
    d.  

  16. According to the kinked-demand curve model, an oligopolistic firm will produce where:   (4 points)

    a.  
    b.  
    c.  
    d.  

  17. Suppose firms in a collusive oligopoly decide to establish their prices at a level that discourages new rivals from entering the industry. This is called:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. Which of the following nations is not a member of the OPEC oil cartel?   (4 points)

    a.  
    b.  
    c.  
    d.  

  19. Advertising can impede economic efficiency when it:   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. Suppose that an industry is characterized by a few firms and price leadership. We would expect that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  21. Monopolistic competition and oligopoly are alike in that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product is an example of:   (4 points)

    a.  
    b.  
    c.  
    d.  

  23. In which of the following market models do individual firms exert no control over product price?   (4 points)

    a.  
    b.  
    c.  
    d.  



  24. Refer to the above figures. Collusion is most likely to occur in the industry(ies) represented by:   (4 points)

    a.  
    b.  
    c.  
    d.  

  25. Two industries that have the same 4-firm concentration ratio can have significantly different Herfindahl indexes.   (4 points)

    a.  
    b.  



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