Exam 5: Market Power: Does It Help or Hurt the Economy

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Use the following diagram to answer the following questions. -Refer to Diagram 5-2. The price and output that would emerge under a competitive industry are:

(Multiple Choice)

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Question 21

Although cartels can increase the profits of their members, they are often difficult to maintain for extended periods of time because:

(Multiple Choice)

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Question 22

Given the following information, find the monopolist's total revenue, marginal revenue, and the profit maximizing level of output.

(Essay)

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Question 23

Suppose a monopolist is currently producing at a point where marginal revenue is $25 and marginal cost is $18. This monopolist should:

(Multiple Choice)

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Question 24

Evaluate the following statement: Because of numerous mergers, market power in the U. S. has increased over the last 50 years.

(Essay)

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Question 25

According to the marginal principle, profits are maximized when marginal revenue exceeds marginal cost.

(True/False)

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Question 26

The problems encountered by the OPEC cartel can be explained by:

(Multiple Choice)

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Question 27

Suppose marginal cost currently exceeds marginal revenue. In order to maximize profits, the firm should:

(Multiple Choice)

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Question 28

Suppose that because of the need to establish plants, entry into the boxwood industry can occur only after several years. What are the implications for price and output?

(Essay)

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Question 29

Marginal revenue is the change in total revenue associated with a one-unit change in output.

(True/False)

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Question 30

At the monopolist's profit maximizing level of output, price will exceed marginal revenue.

(True/False)

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Question 31

Which of the following is a source of market power in the United States?

(Multiple Choice)

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Question 32

Evaluate the following statement: "Because oil refineries have market power and charge as much as they want, the government should strictly control price and profit."

(Essay)

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Question 33

Which of the following would contribute to the break-up of a cartel?

(Multiple Choice)

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Question 34

The less similar firms are, the easier it is to form a cartel.

(True/False)

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Question 35

Increased competition from foreign producers in the manufacturing sector has increased market power in the U. S.

(True/False)

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Question 36

Technical conditions may create a natural monopoly.

(True/False)

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Question 37

For a monopolist, price is greater than marginal revenue.

(True/False)

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Question 38

An oligopoly is an industry composed of:

(Multiple Choice)

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Question 39

The existence of market power in an industry implies that:

(Multiple Choice)

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Question 40

Showing 21 - 40 of 93

Use the following diagram to answer the following questions. -Refer to Diagram 5-2. The price and output that would emerge under a competitive industry are:

Although cartels can increase the profits of their members, they are often difficult to maintain for extended periods of time because:

Given the following information, find the monopolist's total revenue, marginal revenue, and the profit maximizing level of output.

Suppose a monopolist is currently producing at a point where marginal revenue is $25 and marginal cost is $18. This monopolist should:

Evaluate the following statement: Because of numerous mergers, market power in the U. S. has increased over the last 50 years.

According to the marginal principle, profits are maximized when marginal revenue exceeds marginal cost.

The problems encountered by the OPEC cartel can be explained by:

Suppose marginal cost currently exceeds marginal revenue. In order to maximize profits, the firm should:

Suppose that because of the need to establish plants, entry into the boxwood industry can occur only after several years. What are the implications for price and output?

Marginal revenue is the change in total revenue associated with a one-unit change in output.

At the monopolist's profit maximizing level of output, price will exceed marginal revenue.

Which of the following is a source of market power in the United States?

Evaluate the following statement: "Because oil refineries have market power and charge as much as they want, the government should strictly control price and profit."

Which of the following would contribute to the break-up of a cartel?

The less similar firms are, the easier it is to form a cartel.

Increased competition from foreign producers in the manufacturing sector has increased market power in the U. S.

Technical conditions may create a natural monopoly.

For a monopolist, price is greater than marginal revenue.

An oligopoly is an industry composed of:

The existence of market power in an industry implies that:

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Unemployment: the Legacy of Recession, Technological Change, and Free Choice

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Financing Trade and the Trade Deficit

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