Question 1

Non - rivalry, as it relates to public goods, means that

Accepted Answer

A) consumer rivalry does not exist in this market. 
B) producer rivalry does not exist in this market. 
C) consumer - producer rivalry does not exist in this market. 
D) government - producer rivalry does not exist in this market. 
A) consumer rivalry does not exist in this market. 
B) producer rivalry does not exist in this market. 
C) consumer - producer rivalry does not exist in this market. 
D) government - producer rivalry does not exist in this market. A

Question 2

In the 1990s the Mobil Oil Corporation acquired the rights to increase their pollution by 900 pounds of sulfur - dioxide per day at their Torrance, California refinery.These rights were purchased from South Gate, California, at a price of $3 million after the latter acquired them from General Motors.As a result of this change, Mobil increased its output of noxious vapors in Torrance, California by 900 pounds per day.Do you think the environment was harmed as a result of the sale of these pollution rights? Explain.

Accepted Answer

Mobil will be polluting the air far less than General Motors did when they had the rights.The sale of pollution rights, as allowed under the Clean Air Act as amended in 1990, allows firms to reduce pollution in the cost - minimizing way.

Question 3

An un - regulated monopolist will likely

Accepted Answer

A) charge a price below MR. 
B) charge a price above MC. 
C) charge a price equal to MR. 
D) charge a price below MR and charge a price above MC. 
A) charge a price below MR. 
B) charge a price above MC. 
C) charge a price equal to MR. 
D) charge a price below MR and charge a price above MC. B

Question 4

Which of the following raises domestic prices when demand is relatively high?

Accepted Answer

A) Domestic subsidies. 
B) Lump sum tariff. 
C) Excise tariff. 
D) Lump sum tariff and excise tariff. 
A) Domestic subsidies. 
B) Lump sum tariff. 
C) Excise tariff. 
D) Lump sum tariff and excise tariff.

Question 5

Which of the following statements is not true in the presence of externalities?

Accepted Answer

A) Social marginal cost equals the sum of internal and external marginal costs. 
B) A competitive industry generally produces more than a monopoly. 
C) A competitive industry always produces more than the socially efficient level of output. 
D) A monopoly always produces more than the socially efficient level of output. 
A) Social marginal cost equals the sum of internal and external marginal costs. 
B) A competitive industry generally produces more than a monopoly. 
C) A competitive industry always produces more than the socially efficient level of output. 
D) A monopoly always produces more than the socially efficient level of output.

Question 6

How many units of sugar will domestic produces supply after the quota is imposed?

Accepted Answer

A) 35,000. 
B) 30,000. 
C) 58,000. 
D) 23,000. 
A) 35,000. 
B) 30,000. 
C) 58,000. 
D) 23,000.

Question 7

The Clean Air Act and its amendment increase the production costs of the firms in a covered industry through increased:

Accepted Answer

A) fixed cost while marginal cost is unchanged. 
B) marginal cost while fixed cost remain the same. 
C) fixed costs and increased marginal costs. 
D) average cost while marginal cost is unchanged. 
A) fixed cost while marginal cost is unchanged. 
B) marginal cost while fixed cost remain the same. 
C) fixed costs and increased marginal costs. 
D) average cost while marginal cost is unchanged.

Question 8

Suppose a monopoly faces an inverse demand curve of P = 100 - 2Q and has constant marginal cost of 6Q.If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?

Accepted Answer

A) $62.5. 
B) $500. 
C) $562.50 
D) none of the statements associated with this question are correct. 
A) $62.5. 
B) $500. 
C) $562.50 
D) none of the statements associated with this question are correct.

Question 9

We learned in this chapter that there are laws against price discrimination.Yet, many firms openly engage in such practices.For instance, most hotel chains offer discounts to senior citizens that translate into prices that are about 10 percent lower than prices charged to other hotel guests.Why are such firms allowed to engage in such practices?

Accepted Answer

While the Clayton Act (1914) and the Rob

Question 10

Which of the following pieces of legislations are not aimed at curbing the negative effects of asymmetric information?

Accepted Answer

A) Robison Patman Act. 
B) Security Exchange Act. 
C) Lanham Act. 
D) Truth in Lending Simplification Act. 
A) Robison Patman Act. 
B) Security Exchange Act. 
C) Lanham Act. 
D) Truth in Lending Simplification Act.

Question 11

How much would the monopoly in the above graph spend to prevent its price being regulated to marginal (or average) cost?

Accepted Answer

A) $16. 
B) $8. 
C) $4. 
D) $0. 
A) $16. 
B) $8. 
C) $4. 
D) $0.

Question 12

Which of the following is true about a lump - sum tariff?

Accepted Answer

A) Domestic firms' marginal cost curves are shifted up by the amount of the lump - sum tariff. 
B) Foreign firms' average cost curves are shifted up by the amount of the lump - sum tariff. 
C) Domestic firms' average cost curves are shifted up by the amount of the lump - sum tariff. 
D) Foreign firms' marginal cost curves are shifted up by the amount of the lump - sum tariff. 
A) Domestic firms' marginal cost curves are shifted up by the amount of the lump - sum tariff. 
B) Foreign firms' average cost curves are shifted up by the amount of the lump - sum tariff. 
C) Domestic firms' average cost curves are shifted up by the amount of the lump - sum tariff. 
D) Foreign firms' marginal cost curves are shifted up by the amount of the lump - sum tariff.

Question 13

When the government imposes an effective price ceiling on a monopolist, what will happen for sure in the short run?

Accepted Answer

A) The dollar price will increase. 
B) The dollar price will fall. 
C) There will be a shortage of the product. 
D) There will be a surplus of the product. 
A) The dollar price will increase. 
B) The dollar price will fall. 
C) There will be a shortage of the product. 
D) There will be a surplus of the product.

Question 14

The presence of government in the market leads to:

Accepted Answer

A) benefits at no cost to society. 
B) rent - seeking. 
C) externalities. 
D) adverse selection. 
A) benefits at no cost to society. 
B) rent - seeking. 
C) externalities. 
D) adverse selection.

Question 15

Consumer surplus in the unregulated monopoly market in the above graph is

Accepted Answer

A) $16. 
B) $8. 
C) $4. 
D) $0. 
A) $16. 
B) $8. 
C) $4. 
D) $0.

Question 16

How much output would a competitive industry produce?

Accepted Answer

A) 10. 
B) 20. 
C) 15. 
D) 18. 
A) 10. 
B) 20. 
C) 15. 
D) 18.

Question 17

The Clean Air Act aids new entrants in a regulated industry when demand increases and provides an incentive for existing firms to invest in new anti - pollution technology by:

Accepted Answer

A) restricting pollution permits from being traded. 
B) allowing pollution permits to be traded within the industry. 
C) allowing pollution permits to be traded across industries. 
D) allowing pollution permits to be traded within the industry and allowing pollution permits to be traded across industries. 
A) restricting pollution permits from being traded. 
B) allowing pollution permits to be traded within the industry. 
C) allowing pollution permits to be traded across industries. 
D) allowing pollution permits to be traded within the industry and allowing pollution permits to be traded across industries.

Question 18

What is the domestic quantity supplied at the domestic market price?

Accepted Answer

A) 22,000. 
B) 10,000. 
C) 52,000. 
D) 30,000. 
A) 22,000. 
B) 10,000. 
C) 52,000. 
D) 30,000.

Question 19

The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.How much output would a competitive industry produce?

Accepted Answer

A) 10. 
B) 20. 
C) 15. 
D) 8. 
A) 10. 
B) 20. 
C) 15. 
D) 8.

Question 20

The domestic demand and supply for sugar are Qd = 40,000 - 200 P and QSD = 10,000 + 300 P.The foreign supply is QSF = 20,000 + 100 P.Suppose an import quota of 5,000 is imposed in the domestic market.What will be the new market price of sugar?

Accepted Answer

A) 20. 
B) 30. 
C) 40. 
D) 50. 
A) 20. 
B) 30. 
C) 40. 
D) 50.

Non - rivalry, as it relates to public goods, means that

An un - regulated monopolist will likely

Which of the following raises domestic prices when demand is relatively high?

Which of the following statements is not true in the presence of externalities?

How many units of sugar will domestic produces supply after the quota is imposed?

The Clean Air Act and its amendment increase the production costs of the firms in a covered industry through increased:

Which of the following pieces of legislations are not aimed at curbing the negative effects of asymmetric information?

How much would the monopoly in the above graph spend to prevent its price being regulated to marginal (or average) cost?

Which of the following is true about a lump - sum tariff?

When the government imposes an effective price ceiling on a monopolist, what will happen for sure in the short run?

The presence of government in the market leads to:

Consumer surplus in the unregulated monopoly market in the above graph is

How much output would a competitive industry produce?

The Clean Air Act aids new entrants in a regulated industry when demand increases and provides an incentive for existing firms to invest in new anti - pollution technology by:

What is the domestic quantity supplied at the domestic market price?

The external marginal cost of producing coal is MC_external = 6Q while the internal marginal cost is MC_internal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.How much output would a competitive industry produce?

The domestic demand and supply for sugar are Q^d = 40,000 - 200 P and Q^SD = 10,000 + 300 P.The foreign supply is Q^SF = 20,000 + 100 P.Suppose an import quota of 5,000 is imposed in the domestic market.What will be the new market price of sugar?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

Filters

Exam 14: A Managers Guide to Government in the Marketplace

Non - rivalry, as it relates to public goods, means that

An un - regulated monopolist will likely

Which of the following raises domestic prices when demand is relatively high?

Which of the following statements is not true in the presence of externalities?

How many units of sugar will domestic produces supply after the quota is imposed?

The Clean Air Act and its amendment increase the production costs of the firms in a covered industry through increased:

Which of the following pieces of legislations are not aimed at curbing the negative effects of asymmetric information?

How much would the monopoly in the above graph spend to prevent its price being regulated to marginal (or average) cost?

Which of the following is true about a lump - sum tariff?

When the government imposes an effective price ceiling on a monopolist, what will happen for sure in the short run?

The presence of government in the market leads to:

Consumer surplus in the unregulated monopoly market in the above graph is

How much output would a competitive industry produce?

The Clean Air Act aids new entrants in a regulated industry when demand increases and provides an incentive for existing firms to invest in new anti - pollution technology by:

What is the domestic quantity supplied at the domestic market price?

The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.How much output would a competitive industry produce?

The domestic demand and supply for sugar are Qd = 40,000 - 200 P and QSD = 10,000 + 300 P.The foreign supply is QSF = 20,000 + 100 P.Suppose an import quota of 5,000 is imposed in the domestic market.What will be the new market price of sugar?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

Filters

The external marginal cost of producing coal is MC_external = 6Q while the internal marginal cost is MC_internal = 4Q.The inverse demand for coal is given by P = 120 - 2Q.How much output would a competitive industry produce?

The domestic demand and supply for sugar are Q^d = 40,000 - 200 P and Q^SD = 10,000 + 300 P.The foreign supply is Q^SF = 20,000 + 100 P.Suppose an import quota of 5,000 is imposed in the domestic market.What will be the new market price of sugar?