A cartel is an agreement
A) among firms to flood the market and eliminate competition.
B) among firms to steal industrial processes from rival firms.
C) among firms to decrease output and raise price.
D) by the government to restrict imports.
Ques. 2A single-price monopolist will find when it produces its profit-maximizing amount of output that
A) price exceeds marginal revenue.
B) price exceeds marginal cost.
C) marginal revenue equals marginal cost.
D) All of the above occur at the profit-maximizing output level.
Ques. 3Total fixed cost
A) increases as output increases.
B) does not change as output changes.
C) decreases as output increases.
D) initially decreases and then increases as output increases.
Ques. 4Greg and Todd form a partnership and start a business in which each has a 50 percent share of the profit. After a year, the firm goes bankrupt and has debts of 20,000. Greg has no money, but Todd has 25,000 in the bank.
Todd must pay ________ of debt. A) 0 because in a partnership each partner must pay the same
B) 0 because partners in a partnership have limited liability
C) half, or 10,000
D) 20,000
Ques. 5A monopolistically competitive firm is like a perfectly competitive firm insofar as
A) both face perfectly elastic demand.
B) both make an economic profit in the long run.
C) both have MR curves that lie below their demand curves.
D) both make zero economic profit in the long run.
Ques. 6The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure
A) only if the demand was more elastic.
B) only if the demand was more inelastic.
C) only if the supply was more elastic.
D) if either the demand was more inelastic or the supply more elastic.
Ques. 7The income elasticity of demand for bicycles is +10, which implies that bicycles are
A) an inferior good.
B) a normal good.
C) a substitute good for motorbikes.
D) a complement good for motorbikes.
Ques. 8If the marginal social cost of a good equals the marginal private cost of the good, then the marginal external cost of the good
A) is zero.
B) equals the marginal social cost.
C) equals the marginal social benefit.
D) equals the marginal private benefit.
Ques. 9Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is equal to 1.
This slope means that A) a change in x is associated with a bigger change in y.
B) a change in x is associated with a smaller change in y.
C) a change in x is associated with no change in y.
D) a change in x is associated with an equal change in y.
Ques. 10In the United States the richest 20 percent of households receive about ________ of total income.
A) 10 percent
B) 20 percent
C) 50 percent
D) 80 percent
Quick Reply
