problem_set_on_ch13_14_15

problem_set_on_ch13_14_15 - Exam Name_ MULTIPLE CHOICE....

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) An ice cream seller raises the price of its ice cream by 12 percent and observes that the quantity demanded of ice cream just falls by only 7 percent. What can we say about the ice cream producer? 1) A) The ice cream seller can not have any impact on the quantity of ice cream sold in the market. B) The ice cream seller decreases its marginal cost. C) The ice cream seller has some market power. D) The ice cream seller increases its total cost. E) The ice cream seller has some output power. 2) A natural monopoly exists when 2) A) the government protects the firm by granting an exclusive franchise. B) production can take place with constant returns to scale. C) there are no rivals in the market. D) the average total cost curve is upward sloping. E) one firm can supply the entire market at a lower cost than two or more firms. 3) The ________ substitutes for a good, the ________ a monopolist has market power to set the market price of the good. 3) A) less; more B) more; same C) less; less D) more; less E) more; more 4) Which one of the following is an example of a possible natural barrier to entry of new firms into an industry? 4) A) licensing of professions B) issuing a patent C) economies of scale D) a public franchise E) all of the above 1
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Use the figure below to answer the following question(s). Figure 12.5 5) Refer to Figure 12.5 At the profit maximum point for a single - price monopoly, output is ________ units per day and the price is $________ per unit. 5) A) 20; 75 B) 40; 50 C) zero; 0 D) 20; 20 E) 20; 50 6) An activity with the purpose of creating a monopoly is 6) A) costless. B) illegal in Canada. C) called price discrimination. D) called rent seeking. E) called legal monopoly. 2
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Use the figure below to answer the following question(s). Figure 12.7 7) Consider the industry demand curve in Figure 12.7. If the industry operates under perfect competition, which area in the diagram indicates consumer surplus? 7)
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This note was uploaded on 12/31/2011 for the course ECON 101 taught by Professor Vanderwaal during the Fall '08 term at Waterloo.

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problem_set_on_ch13_14_15 - Exam Name_ MULTIPLE CHOICE....

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