Suppose that the price of telephones decreases. If more are purchased then:
a. the total utility of telephones will decrease.
b. the total utility of telephones will be unchanged.
c. the marginal utility of telephones will likely increase.
d. the marginal utility of telephones will likely decrease.
e. both a and d.
QUESTION 2Monopoly is a market structure characterized by a:
a. single firm operating as a price taker.
b. few firms operating as price takers.
c. single firm that is not a price taker.
d. none of these.
QUESTION 3Suppose that for Merv the marginal utility of 50-per-serving caviar is 100 and the marginal utility of 1-per-serving popcorn is 10 . For his snack, Merv should buy:
a. the caviar if he has the 50; otherwise, the popcorn.
b. the caviar if he has the 50; otherwise, nothing.
c. the popcorn, whether he has the 50 or not.
d. one serving each of the caviar and popcorn, if he has 51.
e. five servings of popcorn for each serving of caviar.
QUESTION 4Which of the following firms best fits the definition of a monopoly?
a. General Motors
b. Exxon Mobile
c. Local electric utility
d. AT&T
QUESTION 5If marginal utility is positive, then total utility is:
a. constant.
b. negative.
c. increasing.
d. decreasing.
e. zero.
QUESTION 6A monopolist faces a downward-sloping demand curve because:
a. the demand for its product is inelastic.
b. the industry demand curve is horizontal.
c. resource prices increase as the monopolist expands output.
d. the entire market demand curve is the monopolist's demand curve.
QUESTION 7As more bananas are consumed, other things constant, marginal utility tends to decrease at:
a. the same rate for all people.
b. the same rate for all goods for a given person.
c. the same rate for all people.
d. different rates for different people and for other goods.
e. different rates for different people, but at the same rate as other goods.
QUESTION 8A monopoly is:
a. a seller of a highly advertised and differentiated product in a market with low barriers to entry in the long run.
b. the only seller of a good for which there are no good substitutes in a market with high barriers to entry.
c. the only buyer of a unique raw material.
d. the producer of a product subsidized by the government.
Quick Reply
