ECON December 4, 2008 Exam 3

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "ECON December 4, 2008 Exam 3"

Transcription

1 Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly elastic demand. b. perfectly inelastic demand. c. barriers to entry. d. availability of "free" natural resources, such as water or air. 2. If firms in a monopolistically competitive market are incurring economic losses, which of the following scenarios would best reflect the change facing incumbent firms (who are able to stay in the market) as the market adjusts to its new equilibrium? a. a downward shift in their marginal cost curve b. an upward shift in their marginal cost curve c. a decrease in demand d. an increase in demand 3. One key difference between an oligopoly market and a competitive market is that oligopolistic firms a. are price takers while competitive firms are not. b. are interdependent while competitive firms are not. c. sell completely unrelated products while competitive firms do not. d. sell their product at a price equal to marginal cost while competitive firms do not. 4. In monopolistically competitive markets, economic profits a. signal some incumbent firms to exit the market. b. signal new firms to enter the market. c. are maintained through government-imposed barriers to entry. d. are never possible. 5. When international firms have agreements among themselves on the quantity to produce and/or the price at which to sell output, we refer to their form of organization as a a. Nash arrangement. b. cartel. c. monopolistically competitive oligopoly. d. perfectly competitive oligopoly. 6. The US Postal Service monopoly on mail delivery is a classic example of a monopoly that a. is government-created. b. arises from the ownership of a key resource. c. results in very little advertising of the product that the monopolist produces. d. was broken up by the government a long time ago. 7. Markets with only a few sellers, each offering a product similar or identical to the others, are typically referred to as a. competitive markets. b. monopoly markets. c. monopolistically competitive markets. d. oligopoly markets. Form A Page 1 of 5

2 8. The likely outcome of the prisoners' dilemma is that a. none of the prisoners confess. b. exactly one prisoner confesses. c. all prisoners confess. d. not enough information is given to determine the answer. 9. To define a monopoly, we cite the following characteristics: (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii) The firm generates a large economic profit. (iv) The firm is located in a small geographic market. a. (i) and (ii) b. (i) and (iii) c. (ii) and (iv) 10. Refer to the figure above. Which of the graphs would most likely represent a profit-maximizing firm in a monopolistically competitive market? a. panel a b. panel b c. panel c d. panel d 11. Antitrust laws allow the government to a. prevent mergers. b. break up companies. c. promote competition. Form A Page 2 of 5

3 12. Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. there are barriers to entry. b. all firms can eventually earn economic profits. c. each of the sellers offers a somewhat different product. d. strategic interactions between firms is vitally important. 13. Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for a. resource monopolies. b. natural monopolies. c. government-created monopolies. d. breaking up monopolies into smaller firms. a. (i) and (ii) c. (ii) and (iv) b. (i) and (iii) Suppose you manage a Christmas tree lot in Corpus Christi. Assume the table below shows revenue and cost information for various levels of your Christmas tree sales per hour. Refer to for answering the following three (3) questions. Quantity (dozens) Total Average Marginal Total Cost 0 $0.00 $ Average Cost Marginal Cost 14. Given the information in the table and what you learned in Chapters 12, 13 & 14, you know that the Christmas tree market is an industry that in economics we refer to as a. monopolistic competition. b. natural monopoly. c. a cartel. d. oligopoly. 15. How many trees should you sell per hour to maximize your profit? a. 4 b. 5 c. 6 d. None of the above. 16. At the profit-maximizing level of output, the profit level is a. $5.00. c. $ b. $ d. None of the above. Form A Page 3 of 5

4 17. In order to be successful, a cartel must a. find a way to encourage its members to produce more than they would otherwise produce. b. agree on the total level of production for the cartel, but they need not agree on the amount produced by each member. c. agree on the total level of production and on the amount produced by each member. d. find a way to encourage its members to reduce their costs. The figure below reflects the cost and revenue structure for a monopoly firm. Use it to answer the following questions. 18. Refer to the figure above. The profit maximizing quantity for this monopoly firm is a. Q 1. b. Q 2. c. Q 3. d. Q Refer to the figure above. The profit maximizing price for this monopoly firm is a. P 0. b. P 1. c. P 2. d. P Refer to the figure above. The marginal cost curve for a monopoly firm is depicted by curve a. A. b. B. c. C. d. D. 21. When a profit-maximizing firm in a monopolistically competitive market is producing the long-run equilibrium quantity, a. its average revenue will equal its marginal cost. b. its marginal revenue will exceed its marginal cost. c. it will be earning positive economic profits. d. its demand curve will be tangent to its average-total-cost curve. 22. When firms are faced with making strategic choices in order to maximize profit, economists typically use a. the theory of monopoly to model their behavior. b. the theory of aggressive competition to model their behavior. c. game theory to model their behavior. d. cartel theory to model their behavior. Form A Page 4 of 5

5 23. A natural monopoly occurs when a. the product is sold in its natural state (such as water or diamonds). b. there are economies of scale over the relevant range of output. c. the firm is characterized by a rising marginal cost curve. d. production requires the use of free natural resources, such as water or air. 24. A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following? i. Average revenue exceeds marginal revenue. ii. Marginal revenue exceeds average revenue. iii. Average revenue is equal to marginal revenue. iv. is always maximized along with profit. a. (i) and (ii) c. (ii) and (iv) b. (i) and (iii) d. (i) only. 25. The difference in total surplus between a socially efficient level of production and a monopolist's level of production is a. offset by regulatory revenues. b. called a deadweight loss. c. usually offset by taxes levied against monopolies. EXTRA CREDIT 26. What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $16. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $8. Average total cost for 10 units of output is $6. a. $20 c. $100 b. $80 d. $160 Scenario: Consider two cigarette companies, PM Inc. and Brown Inc. If neither company advertises, the two companies split the market. If they both advertise, they again split the market, but profits are lower, since each company must bear the cost of advertising. Yet if one company advertises while the other does not, the one that advertises attracts customers from the other. 27. Refer to the Scenario above. What will these two companies do if they behave as individual profit maximizers? a. Neither company will advertise. b. Both companies will advertise. c. One company will advertise, the other will not. d. None of the above are correct; there is no way of knowing without more information. 28. Refer to the Scenario above. In 1971, Congress passed a law that banned cigarette advertising on television. If cigarette companies are profit maximizers, it is likely that a. neither company opposed the ban on advertising. b. Brown Inc. sued the federal government on grounds that the ban constitutes a civil rights violation. c. both companies sued the federal government on grounds that the ban constitutes a civil rights violation. d. both companies retaliated with black-market operations. Form A Page 5 of 5

Many sellers: There are many firms competing for the same group of customers.

Many sellers: There are many firms competing for the same group of customers. Microeconomics 2 Chapter 16 Monopolistic Competition 16-1 Between monopoly and perfect Competition One type of imperfectly competitive market is an oligopoly, a market with only a few sellers, each offering

More information

Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet. Class Day/Time

Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet. Class Day/Time 1 Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet Name Class Day/Time Questions of this homework are in the next few pages. Please find the answer of the questions and fill in the blanks

More information

Unit 13 AP Economics - Practice

Unit 13 AP Economics - Practice DO NOT WRITE ON THIS TEST! Unit 13 AP Economics - Practice Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A natural monopoly exists whenever a single

More information

CH short answer study questions Answer Section

CH short answer study questions Answer Section CH 15-16 short answer study questions Answer Section ESSAY 1. ANS: There are a large number firms; each produces a slightly different product; firms compete on price, quality and marketing; and firms are

More information

Chapter 14 Oligopoly and Monopoly

Chapter 14 Oligopoly and Monopoly Economics 6 th edition 1 Chapter 14 Oligopoly and Monopoly Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall 2017 Oligopoly: a very different market structure

More information

Unit 6 Perfect Competition and Monopoly - Practice Problems

Unit 6 Perfect Competition and Monopoly - Practice Problems Unit 6 Perfect Competition and Monopoly - Practice Problems Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One characteristic of a perfectly competitive

More information

The above Figure 1 shows the demand and cost curves facing a monopolist.

The above Figure 1 shows the demand and cost curves facing a monopolist. Practice 13&14 1) The key characteristics of a monopolistically competitive market structure include A) few sellers. B) sellers selling similar but differentiated products. C) high barriers to entry. D)

More information

Practice Test for Final

Practice Test for Final Name: Class: Date: Practice Test for Final True/False Indicate whether the statement is true or false. 1. A public good or service can be consumed by paying and nonpaying customers alike. 2. An example

More information

The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market.

The competition in monopolistically competitive markets is most likely a result of having many sellers in the market. Chapter 16 Monopolistic Competition TRUE/FALSE 1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market. ANS: T 2. The "monopoly" in monopolistically

More information

Principles of Microeconomics Module 5.1. Understanding Profit

Principles of Microeconomics Module 5.1. Understanding Profit Principles of Microeconomics Module 5.1 Understanding Profit 180 Production Choices of Firms All firms have one goal in mind: MAX PROFITS PROFITS = TOTAL REVENUE TOTAL COST Two ways to reach this goal:

More information

Oligopoly. Quantity Price(per year) 0 $120 2,000 $100 4,000 $80 6,000 $60 8,000 $40 10,000 $20 12,000 $0

Oligopoly. Quantity Price(per year) 0 $120 2,000 $100 4,000 $80 6,000 $60 8,000 $40 10,000 $20 12,000 $0 Oligopoly 1. Markets with only a few sellers, each offering a product similar or identical to the others, are typically referred to as a. monopoly markets. b. perfectly competitive markets. c. monopolistically

More information

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester Duration: 110 minutes ECON101 - Introduction to Economics I Final Exam Type A 11 January

More information

CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question. Class: Date: CH 13 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One requirement for an industry to be perfectly competitive is that a. sellers and buyers

More information

Use the following to answer question 4:

Use the following to answer question 4: Homework Chapter 11: Name: Due Date: Wednesday, December 4 at the beginning of class. Please mark your answers on a Scantron. It is late if your Scantron is not complete when I ask for it at 9:35. Get

More information

a. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run

a. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run I. From Seminar Slides: 3, 4, 5, 6. 3. For each of the following characteristics, say whether it describes a perfectly competitive firm (PC), a monopolistically competitive firm (MC), both, or neither.

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Review 10-14-15 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. The four-firm concentration ratio equals the percentage of the value of accounted

More information

2013 sample MC CH 15. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

2013 sample MC CH 15. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question. Class: Date: 2013 sample MC CH 15 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Monopolistic competition is identified by a. many firms producing a slightly

More information

Ecn Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman.

Ecn Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman. Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman Final Examination You have until 12:30pm to complete the exam, be certain to use your

More information

Ecn Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman. Final Exam

Ecn Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman. Final Exam Ecn 100 - Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman Final Exam You have until 8pm to complete the exam, be certain to use your time wisely.

More information

FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

More information

Section I (20 questions; 1 mark each)

Section I (20 questions; 1 mark each) Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

More information

Section I (20 questions; 1 mark each)

Section I (20 questions; 1 mark each) Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

More information

Ecn Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman. Final Exam

Ecn Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman. Final Exam Ecn 100 - Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman Final Exam You have until 5:30pm to complete the exam, be certain to use your time wisely.

More information

29/02/2016. Market structure II- Other types of imperfect competition. What Is Monopolistic Competition? OTHER TYPES OF IMPERFECT COMPETITION

29/02/2016. Market structure II- Other types of imperfect competition. What Is Monopolistic Competition? OTHER TYPES OF IMPERFECT COMPETITION Market structure II- Other types of imperfect competition OTHER TYPES OF IMPERFECT COMPETITION Characteristics of Monopolistic Competition Monopolistic competition is a market structure in which many firms

More information

Sample Multiple-Choice Questions

Sample Multiple-Choice Questions E03 3 Microeconomics Summative Exam SAMPLE QUESTIONS Sample Multiple-Choice Questions Circle the letter of each correct answer 1 True statements about the theory of the firm in the short run and long run

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason

More information

ECONOMICS CHAPTER 9: FORMS OF MARKET

ECONOMICS CHAPTER 9: FORMS OF MARKET ECONOMICS CHAPTER 9: FORMS OF MARKET Class: XII(ISC) 2017-2018 Q1) Difference between Oligopoly and Monopolistic competition. Basis Oligopoly Monopolistic competition 1. Meaning It is that form of market

More information

Principles of Economics. January 2018

Principles of Economics. January 2018 Principles of Economics January 2018 Monopoly Contents Market structures 14 Monopoly 15 Monopolistic competition 16 Oligopoly Principles of Economics January 2018 2 / 39 Monopoly Market power In a competitive

More information

Economics 110 Final exam Practice Multiple Choice Qs Fall 2013

Economics 110 Final exam Practice Multiple Choice Qs Fall 2013 Final Exam Practice Multiple Choice Questions - ANSWER KEY Which of the following statements is not correct? a. Monopolistic competition is similar to monopoly because in each market structure the firm

More information

Chapter 15 Oligopoly

Chapter 15 Oligopoly Goldwasser AP Microeconomics Chapter 15 Oligopoly BEFORE YOU READ THE CHAPTER Summary This chapter explores oligopoly, a market structure characterized by a few firms producing a product that mayor may

More information

Microeconomics. More Tutorial at

Microeconomics.  More Tutorial at Microeconomics 1. Suppose a firm in a perfectly competitive market produces and sells 8 units of output and has a marginal revenue of $8.00. What would be the firm s total revenue if it instead produced

More information

COMPETITION AND MARKETS BEFORE YOU BEGIN. Market Structures. Looking at the Chapter. Date Period. Chapter

COMPETITION AND MARKETS BEFORE YOU BEGIN. Market Structures. Looking at the Chapter. Date Period. Chapter COMPETITION AND MARKETS BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. Market Structures Perfect Competition sellers product No barriers to entry Price taker Produce where

More information

Monopoly CHAPTER. Goals. Outcomes

Monopoly CHAPTER. Goals. Outcomes CHAPTER 15 Monopoly Goals in this chapter you will Learn why some markets have only one seller Analyze how a monopoly determines the quantity to produce and the price to charge See how the monopoly s decisions

More information

Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1

Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1 CH 12 Taylor: Principles of Economics 3e 1 Monopolistic Competition and Differentiated Products Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated

More information

Monopolistic Competition. Chapter 17

Monopolistic Competition. Chapter 17 Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic

More information

6) In the above figure of a monopolistically competitive firm, the area of economic profit is A) ADB. B) ABC. C) P 2 FEP 5. D) P 2 AD P 4.

6) In the above figure of a monopolistically competitive firm, the area of economic profit is A) ADB. B) ABC. C) P 2 FEP 5. D) P 2 AD P 4. 1 1) The maximum total economic profit that can be made by colluding duopolists A) equals the economic profit made by a monopolist. B) exceeds the economic profit made by a monopolist. C) is less than

More information

Eco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13=============================

Eco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= Eco201 Review questions for chapters 13-15 Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= 1) A monopoly has two key features, which are. A) barriers to entry and close substitutes

More information

Monopolistic Competition

Monopolistic Competition Monopolistic Competition 1. In a monopolistically competitive industry, profit-maximizing firms are price a. takers who produce a quantity where price is equal to marginal cost. b. takers who produce a

More information

At P = $120, Q = 1,000, and marginal revenue is ,000 = $100

At P = $120, Q = 1,000, and marginal revenue is ,000 = $100 Microeconomics, monopoly, final exam practice problems (The attached PDF file has better formatting.) *Question 1.1: Marginal Revenue Assume the demand curve is linear.! At P = $100, total revenue is $200,000.!

More information

Figure: Computing Monopoly Profit

Figure: Computing Monopoly Profit Name: Date: 1. Compared to perfect competition: A) monopoly produces more at a lower price. B) monopoly produces where MR > MC, and a perfectly competitively firm produces where P = MC. C) monopoly may

More information

MARKETS. Part Review. Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2

MARKETS. Part Review. Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2 Part Review 4 FIRMS AND MARKETS Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2 On May 14, 2002 Sony announced it was cutting the cost of its PlayStation 2 by 33 percent,

More information

sample test 3 - spring 2013

sample test 3 - spring 2013 sample test 3 - spring 2013 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. A natural monopoly occurs when a. the product is sold in its

More information

Perfect Competition CHAPTER14

Perfect Competition CHAPTER14 Perfect Competition CHAPTER14 MARKET TYPES The four market types are Perfect competition Monopoly Monopolistic competition Oligopoly MARKET TYPES Perfect Competition Perfect competition exists when Many

More information

FOR MORE PAPERS LOGON TO

FOR MORE PAPERS LOGON TO ECO401- Economics Question No: 1 ( Marks: 1 ) - Please choose one Land is best described as: Produced factors of production. "Organizational" resources. Physical and mental abilities of people. "Naturally"

More information

Market Structure & Imperfect Competition

Market Structure & Imperfect Competition In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) 44111 (1393-94 1 st term) - Group 2 Dr. S. Farshad Fatemi Market Structure

More information

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION.

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION. !! www.clutchprep.com CONCEPT: THE FOUR MARKET MODELS Market structure describes the environment in which a firm operates, determined by the Perfect Competition Monopolistic Competition Oligopoly Monopoly

More information

PWNI I'IHITIIBIFI UNIVERSITY EXAMINER(S) INSTRUCTIONS FACULTY OF MANAGEMENT SCIENCES QUALIFICATION: BACHELOR OF ACCOUNTING

PWNI I'IHITIIBIFI UNIVERSITY EXAMINER(S) INSTRUCTIONS FACULTY OF MANAGEMENT SCIENCES QUALIFICATION: BACHELOR OF ACCOUNTING . I'IHITIIBIFI UNIVERSITY OF SCIENCE FII'ID TECHNOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE QUALIFICATION: BACHELOR OF ACCOUNTING QUALIFICATION CODE: Z3BECO LEVEL:

More information

Quiz #5 Week 04/12/2009 to 04/18/2009

Quiz #5 Week 04/12/2009 to 04/18/2009 Quiz #5 Week 04/12/2009 to 04/18/2009 You have 30 minutes to answer the following 17 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. AUBG, Fall 2015, Principles Micro with P. Stankov, Sample MT2 NOTE: The actual no. of questions on the actual MT will be 30, each for 0.67 grade points. MULTIPLE CHOICE. Choose the one alternative that

More information

ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark)

ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark) Unit 6 I. Choose the correct answer (each question carries 1 mark) 1. A market structure which produces heterogenous products is called: a) Monopoly b) Monopolistic competition c) Perfect competition d)

More information

Oligopoly and Monopolistic Competition

Oligopoly and Monopolistic Competition Oligopoly and Monopolistic Competition Introduction Managerial Problem Airbus and Boeing are the only two manufacturers of large commercial aircrafts. If only one receives a government subsidy, how can

More information

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description:

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description: Lecture 24TECO 202 24TPrinciples of Microeconomics COURSE OUTLINE Revised: Fall 2015 Prerequisites: None Course Description: Introduces the basic concepts of microeconomics. Explores the free market concepts

More information

Syllabus item: 57 Weight: 3

Syllabus item: 57 Weight: 3 1.5 Theory of the firm and its market structures - Monopoly Syllabus item: 57 Weight: 3 Main idea 1 Monopoly: - Only one firm producing the product (Firm = industry) - Barriers to entry or exit exists,

More information

2) A production method that relies on large quantities of labor and smaller quantities of capital equipment is referred to as a: 2)

2) A production method that relies on large quantities of labor and smaller quantities of capital equipment is referred to as a: 2) Micro: TA Session 4, Problem set MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The main difference between a short-run production function and

More information

ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions

ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount

More information

ECO 202 Principles of Microeconomics

ECO 202 Principles of Microeconomics ECO 202 Principles of Microeconomics Revised: Fall 2016 COURSE OUTLINE Prerequisites: None Course Description: Introduces the basic concepts of microeconomics. Explores the free market concepts with coverage

More information

A monopoly market structure is one characterized by a single seller of a unique product with no close substitutes.

A monopoly market structure is one characterized by a single seller of a unique product with no close substitutes. These notes provided by Laura Lamb are intended to complement class lectures. The notes are based on chapter 12 of Microeconomics and Behaviour 2 nd Canadian Edition by Frank and Parker (2004). Chapter

More information

Downloaded from UNIT 4 FORMS OF MARKET & PRICE DETERMINATION POINTS TO REMEMBER

Downloaded from   UNIT 4 FORMS OF MARKET & PRICE DETERMINATION POINTS TO REMEMBER UNIT 4 FORMS OF MARKET & PRICE DETERMINATION POINTS TO REMEMBER Market implies a system with the help of which the buyers and seller of a commodity or service come to contact with each other and complete

More information

2007 Thomson South-Western

2007 Thomson South-Western BETWEEN MONOPOLY AND PERFECT COMPETITION Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect competition includes industries in which

More information

AP Microeconomics Review Session #3 Key Terms & Concepts

AP Microeconomics Review Session #3 Key Terms & Concepts The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph

More information

CH 14. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

CH 14. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question. Class: Date: CH 14 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. We define a monopoly as a market with a. one supplier and no barriers to entry. b. one

More information

CHAPTER 8: SECTION 1 A Perfectly Competitive Market

CHAPTER 8: SECTION 1 A Perfectly Competitive Market CHAPTER 8: SECTION 1 A Perfectly Competitive Market Four Types of Markets A market structure is the setting in which a seller finds itself. Market structures are defined by their characteristics. Those

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. PRACTICE FOR PERFECT COMPETITION Fatma Nur Karaman MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What is the difference between perfect competition

More information

Monopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials

Monopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials LESSON 5 Monopoly Introduction and Description Lesson 5 extends the theory of the firm to the model of a Students will see that the profit-maximization rules for the monopoly are the same as they were

More information

ECON 102 Brown Final Exam (New Material) Practice Exam Solutions

ECON 102 Brown Final Exam (New Material) Practice Exam Solutions www.liontutors.com ECON 102 Brown Final Exam (New Material) Practice Exam Solutions 1. B A very large percent of their earnings comes from economic rent 2. B Any funds left, after everyone who has a claim

More information

Monopolistic Competition

Monopolistic Competition CHAPTER 16 Monopolistic Competition Goals in this chapter you will Examine market structures that lie between monopoly and competition Analyze competition among firms that sell differentiated products

More information

Week One What is economics? Chapter 1

Week One What is economics? Chapter 1 Week One What is economics? Chapter 1 Economics: is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2 Questions of this SAMPLE exam were randomly chosen and may NOT be representative of the difficulty or focus of the actual examination. The professor did NOT review these questions. MULTIPLE CHOICE. Choose

More information

Monopolistic Competition

Monopolistic Competition 16 Monopolistic Competition PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Monopolistic Competition Imperfect competition Between perfect competition and monopoly Oligopoly

More information

Monopoly. Cost. Average total cost. Quantity of Output

Monopoly. Cost. Average total cost. Quantity of Output While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The

More information

Microeconomics Exam Notes

Microeconomics Exam Notes Microeconomics Exam Notes Opportunity Cost What you give up to get it Production Possibility Frontier Maximum attainable combination of two products (Concept of Opportunity Cost). Main Decision Makers:

More information

Economics 101 Midterm Exam #2. April 9, Instructions

Economics 101 Midterm Exam #2. April 9, Instructions Economics 101 Spring 2009 Professor Wallace Economics 101 Midterm Exam #2 April 9, 2009 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not

More information

Practice Final Exam Questions

Practice Final Exam Questions Class: Date: Practice Final Exam Questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A profit-maximizing firm in a competitive market is currently

More information

Ecn Intermediate Microeconomic Theory University of California - Davis December 10, 2009 Instructor: John Parman. Final Exam

Ecn Intermediate Microeconomic Theory University of California - Davis December 10, 2009 Instructor: John Parman. Final Exam Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 2009 Instructor: John Parman Final Exam You have until 12:30pm to complete this exam. Be certain to put your name,

More information

Microeconomics (Oligopoly & Game, Ch 12)

Microeconomics (Oligopoly & Game, Ch 12) Microeconomics (Oligopoly & Game, Ch 12) Lecture 17-18, (Minor 2 coverage until Lecture 18) Mar 16 & 20, 2017 CHAPTER 12 OUTLINE 12.1 Monopolistic Competition 12.2 Oligopoly 12.3 Price Competition 12.4

More information

Economics Chapter 8 Competition and Markets

Economics Chapter 8 Competition and Markets Economics Chapter 8 Competition and Markets CHAPTER 8: SECTION 1 - A Perfectly Competitive Market Four Types of Markets o A is the setting in which a seller finds itself. Market structures are defined

More information

Economics Chapter 8 Competition and Markets

Economics Chapter 8 Competition and Markets Economics Chapter 8 Competition and Markets CHAPTER 8: SECTION 1 - A Perfectly Competitive Market Four Types of Markets o A is the setting in which a seller finds itself. Market structures are defined

More information

Introduction to Agricultural Economics Agricultural Economics 105 Spring 2011

Introduction to Agricultural Economics Agricultural Economics 105 Spring 2011 Name Section (1 point) Introduction to Agricultural Economics Agricultural Economics 105 Spring 2011 Second Hour Exam Version 1 For the multiple choice questions, circle the most correct answer, there

More information

ECON 2100 (Fall 2018 Section 11) Exam #3B

ECON 2100 (Fall 2018 Section 11) Exam #3B ECON 21 (Fall 218 Section 11) Exam #3B Multiple Choice Questions: (3 points each) 1. I am taking of the exam. B. Version B 2. Market Power refers to a situation in which A. a firm charges different consumers

More information

ECON 2100 (Fall 2018 Section 11) Exam #3A

ECON 2100 (Fall 2018 Section 11) Exam #3A ECON 21 (Fall 218 Section 11) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Market Power refers to a situation in which A. a firm has some control over

More information

Chapter 10 Pure Monopoly

Chapter 10 Pure Monopoly Chapter 10 Pure Monopoly Multiple Choice Questions 1. Pure monopoly means: A. any market in which the demand curve to the firm is downsloping. B. a standardized product being produced by many firms. C.

More information

ECON 102 Wooten Final Exam Practice Exam Solutions

ECON 102 Wooten Final Exam Practice Exam Solutions www.liontutors.com ECON 102 Wooten Final Exam Practice Exam Solutions 1. A monopolist will increase price and decrease quantity to maximize profits when compared to perfect competition because a monopolist

More information

Ecn Intermediate Microeconomic Theory University of California - Davis September 9, 2009 Instructor: John Parman. Final Exam

Ecn Intermediate Microeconomic Theory University of California - Davis September 9, 2009 Instructor: John Parman. Final Exam Ecn 100 - Intermediate Microeconomic Theory University of California - Davis September 9, 2009 Instructor: John Parman Final Exam You have until 1:50pm to complete this exam. Be certain to put your name,

More information

Coffee is produced at a constant marginal cost of $1.00 a pound. Due to a shortage of cocoa beans, the marginal cost rises to $2.00 a pound.

Coffee is produced at a constant marginal cost of $1.00 a pound. Due to a shortage of cocoa beans, the marginal cost rises to $2.00 a pound. Microeconomics, Module 11: Monopoly (Chapter 10) Illustrative Test Questions (The attached PDF file has better formatting.) Updated: June 27, 2005 Question 11.1: Monopoly All but which of the following

More information

Monopoly and How It Arises

Monopoly and How It Arises 13 MONOPOLY Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists If a good has a close substitute, even if it is produced by only one

More information

Chapter 13 Perfect Competition

Chapter 13 Perfect Competition Chapter 13 Perfect Competition 13.1 A Firm's Profit-Maximizing Choices 1) Is the number of sellers in the market the only thing that is different in each of the four market types economists study? Answer:

More information

Imperfect Competition. Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly.

Imperfect Competition. Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Oligopoly Imperfect Competition Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect Competition Imperfect competition includes industries

More information

Introduction. Learning Objectives. Learning Objectives. Chapter 27. Oligopoly and Strategic Behavior

Introduction. Learning Objectives. Learning Objectives. Chapter 27. Oligopoly and Strategic Behavior Chapter 27 Oligopoly and Introduction On a typical day, United Parcel Service will transport over 10 million packages. UPS and its main rival, FedEx Ground, earn more than three-fourths of total revenue

More information

UNIT 4 FORMS OF MARKET & PRICE DETERMINATION POINTS TO REMEMBER Market implies a system with the help of which the buyers and seller of a commodity or service come to contact with each other and complete

More information

14.01 Principles of Microeconomics, Fall 2007 Chia-Hui Chen November 7, Lecture 22

14.01 Principles of Microeconomics, Fall 2007 Chia-Hui Chen November 7, Lecture 22 Monopoly. Principles of Microeconomics, Fall Chia-Hui Chen November, Lecture Monopoly Outline. Chap : Monopoly. Chap : Shift in Demand and Effect of Tax Monopoly The monopolist is the single supply-side

More information

Slides and Images, Worth Publishers Inc. 8-1

Slides and Images, Worth Publishers Inc. 8-1 Perfect Competition Michael J. Murray Slides and Images, Worth Publishers Inc. 8-1 Market Structure Analysis By observing a few industry characteristics, we can predict pricing and output behavior of the

More information

Hours needed to produce one unit of manufactured goods agricultural goods Pottawattamie 6 3 Muscatine 3 2

Hours needed to produce one unit of manufactured goods agricultural goods Pottawattamie 6 3 Muscatine 3 2 Econ 101, sections 2 and 6, S06 Schroeter Makeup Exam Choose the single best answer for each question. 1. A "zero sum game" is one in which a. every player breaks even in the long run. b. there is only

More information

ECON 230D2-002 Mid-term 1. Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

ECON 230D2-002 Mid-term 1. Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ECON 230D2-002 Mid-term 1 Name Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Scenario 12.3: Suppose a stream is discovered whose

More information

Monopoly and How It Arises

Monopoly and How It Arises Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing

More information

REDEEMER S UNIVERSITY

REDEEMER S UNIVERSITY REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics

More information

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2014 15 Fall Semester ECON101 Introduction to Economics I Final Exam Type A 26 January 2015 Duration: 100 minutes

More information

Economics 101 Section 5

Economics 101 Section 5 Economics 101 Section 5 Lecture #22 April 13, 2004 Chapter 10 Monopolistic Competition Oligopoly Game Theory Monopolistic Competition 3 characteristics of a monopolistically competitive market 1) Many

More information

ECON 4550 (Fall 2011) Exam 1

ECON 4550 (Fall 2011) Exam 1 ECON 455 (Fall 211) Exam 1 Name Multiple Choice Questions: (4 points each) 1. Jimmy is risk neutral. He is faced with a random payoff with expected value of $2,. Further, for this payoff the highest possible

More information