Which of the following is not a reason why government

20) Which of the following is not a reason why government officials are willing to impose entry
barriers?
A) to promote an equitable distribution of income
B) to encourage innovation which may improve the standard of living in the long run
C) to raise revenue
20)
D) to increase economic efficiency
Answer: A
Diff: 1 Page Ref: 462 - 463/462 - 463
Topic: Government - Imposed Barriers
Learning Outcome: Micro 5: List ways in which governments intervene in markets and explain the
consequences of such intervention
AACSB: Reflective Thinking
21) Interdependence of firms is most common in
B) monopolistic industries.
21)
C) oligopolistic industries.
D) monopolistically competitive industries.
Answer: C
Diff: 1 Page Ref: 460/460
Topic: Interdependence
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
22) Oligopolies exist and do not attract new rivals because
C) of barriers to entry.
22)
D) of competition.
Answer: C
Diff: 1 Page Ref: 461/461
Topic: Barriers to Entry
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
23) An example of a barrier to entry is 23)
Diff: 2 Page Ref: 461/461
Topic: Barriers to Entry
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
6

24) Which of the following is important in determining the extent of competition in an industry?
A) whether or not the industry product is differentiated or standardized
B) the minimum level of short run average total costs of production
C) the minimum efficient scale of production relative to market demand
D) the level of market demand for the industry ʹ s product
Answer: C
24)
Diff: 2 Page Ref: 461/461
Topic: Economies of Scale
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking