Which curve intersects the AVC curve at its minimum point?
A) the MC curve
B) the ATC curve
C) the AFC curve
D) the MP curve
Ques. 2Excess capacity and high advertising expenditures are most likely to be encountered in
A) perfect competition.
B) monopolistic competition.
C) monopoly.
D) both monopolistic and perfect competition.
Ques. 3One of the obstacles to efficiency is monopoly.
Indicate whether the statement is true or false
Ques. 4In which of the following cases does the tragedy of the commons occur? I. Cattle grazing on private ranches. II. Catching lobsters off the coast of Florida. III. Raising salmon on salmon farms. IV. Using legal services provided by the courts.
A) I only
B) II only
C) II and III only
D) I and IV only
Ques. 5If Sony required all its retailers not to sell televisions from other companies, Sony would be engaging in what kind of activity? Is Sony's requirement legal or does it violate the Clayton Act?
What will be an ideal response?
Ques. 6Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth 10,000 and lemons are worth 4,000. Without effective signals such as warranties, the owners of peaches cannot sell their cars for 10,000 because the
A) owners of peaches cannot convince buyers that their cars are worth 10,000.
B) buyers cannot convince owners of peaches to sell their cars for 10,000.
C) owners of lemons cannot convince buyers that their cars are worth more than 4,000.
D) buyers cannot convince owners of lemons to sell their cars for 4,000.
Ques. 7A firm that discriminates has ________ a nonprejudiced firm and ________.
A) the same costs as; competes most often with imported goods and services
B) the same costs as; can successfully maximize profit in a competitive industry
C) lower costs than; drives other firms out of a competitive industry
D) higher costs than; cannot survive in a competitive industry
Ques. 8Describe the conditions under which monopoly exists. Give two examples.
What will be an ideal response?
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