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Microeconomics > Ch. 22-26 > Flashcards

Ch. 22-26 Flashcards

1
Q

There are no monopolies in the United States. (T/F)

A

False

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2
Q

The monopolist produces at the minimum point of her ATC curve. (T/F)

A

False

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3
Q

A monopoly is a firm that produces at the output in an industry. (T/F)

A

True

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4
Q

The monopolist produces

A

where MC=MR

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5
Q

The monopolist will not lose money in the long run. (T/F)

A

True

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6
Q

The most efficient output is found

A

at the bottom of the ATC curve.

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7
Q

An example of government ownership of a monopoly would be

A

the Tennessee Valley Authority.

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8
Q

The monopolist charges a higher price than the perfect competitor in the long run. (T/F)

A

True

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9
Q

A monopolist operates at the minimum point of there ATC curve

A

in neither the short run not the long run.

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10
Q

If the government attempts to break up a natural monopoly to enforce competition in an industry

A

the average cost of producing the good will increase.

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11
Q

In the United States, natural monopolies

A

are commonly regulated by governments.

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12
Q

Patents function to

A

temporarily protect monopoly power.

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13
Q

Monopoly firms are

A

sometimes very large.

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14
Q

A public utility would be an example of

A

a natural monopoly

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15
Q

Monopoly profit

A

equals (price-ATC) times quantity sold.

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16
Q

When an industry is a natural monopoly

A

the economies of scale in it arc very great.

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17
Q

The perfect competitor____produces at the output at which MC=MR; the monopolist ____ produces at the output at which MC=MR.

A

Always;always

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18
Q

All monopolists are imperfect Competitors.(T/F)

A

true

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19
Q

The International Nickel Company is not a natural monopoly.(T/F)

A

true

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20
Q

A monopolist make a profit

A

in both the short and long run.

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21
Q

A monopolist can lose money.(T/F)

A

true

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22
Q

Each of the following is a legal barrier to entry into an industry except

A

brand names.

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23
Q

One basis for monopoly is control over an essential resource. (T/F)

A

true

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24
Q

Monopolies tend to be inefficient. (T/F)

A

true

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25
Q

The concentration ratio is the percentage of ___ earned by the __ largest firms In the industry.

A

sales;4

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26
Q

The tobacco, healthcare wholesale, and beverage industries all have a concentration ratio of over

A

80

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27
Q

___ is leagal in the U.S.

A

Cut throat competition

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28
Q

A highly oligopolied industry would have a ___ Herfindahl-Hirschman Index and a ___ concentration ratio.

A

High;high

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29
Q

Oligopolies are illegal in most states.(T/F)

A

false

30
Q

A Herfindahl-Hirschman Index of 10,000 would mean there is how many firms in the industry?

A

1

31
Q

The market structure in which the behavior of any given firm depends on the behavior of the other firms in the industry is

A

oligopoly

32
Q

Which one of these firms would be oligopolist?

A

Proctor & Gamble

33
Q

Oligopoly is characterized by

A

high barriers to entry

34
Q

the closer the industry concentration ratio is to 100, the more likely it is that

A

there is a small number of firms.

35
Q

The highest concentration ratio

A

is in Industry Y.

36
Q

The Highest Herfindahl-Hirschman Index

A

is in Industry X

37
Q

An example of an oligopoly market would be one in which ____ firms sell ___%j of the output.

A

4;80

38
Q

Each of the following are oligopoly except

A

Microsoft

39
Q

Which of the following represents an illegal control of prices

A

colluding

40
Q

A cartel is

A

a group of firms acting under collusion to control output and maximize group profits

41
Q

Price leadership is a leagal way to reduce the price problems oligopolies face.(T/F)

A

true

42
Q

If the market share of the largest firm in an industry is 50%, then theoretically, the highest possible Herfindahl-Hirschman Index for this industry would be

A

5,000

43
Q

An industry with 4 firms each having 25% market share would have a Herfindahl-Hirschman Index of

A

2,500

44
Q

At one end of the competitive spectrum is cutthroat competition. At the other end is

A

cartel

45
Q

A concentration ratio of 100 would imply that the industry has ___

A

no more than four firms

46
Q

Corporate concentration can be measured by

A

both the concentration ratio and the Herfindahl-Hirschman Index

47
Q

As foreign imports become a greater percentage of sales in oligopolized industries.=, the concentration ratio and the Herfindahl-Hirschman Index

A

become less accurate as a measure of concentration

48
Q

The higher the concentration ratio, the higher the degree of oligopolization.(T/F)

A

True

49
Q

A monopolistic competitive industry has

A

many firms producing a differentiated product.

50
Q

Product differentiation takes place in the minds of the buyer. (T/F)

A

true

51
Q

Price discrimination

A

occurs when a seller charges 2 or more prices for the same good or service.

52
Q

Which statement is true about the monopolistic competitor in the long run?

A

it will be breaking even.

53
Q

Price discrimination means

A

charging different prices for identical goods that have identical production costs.

54
Q

Through product differentiation, firms attempt to increase the

A

demands for their products, while making its demand less elastic.

55
Q

Which of the following would NOT cause the costs in a monopolistically competitive industry to be higher than those in a competitive industry?

A

A large number of competitors.

56
Q

An important result in long-run equilibrium in monopolistic competition is that the equilibrium point results in

A

price=ATC

57
Q

Which is NOT a characteristic of monopolistic competition?

A

each firm must take into account the actions of its rivals.

58
Q

The monopolist competitor has more a elastic demand curve than the monopolist.(T/F)

A

true

59
Q

Statement 1. The airlines often engage in price discrimination.
Statement 2. Price discrimination occurs when a seller charges two or more prices for the same good or service.

A

Both statements are true

60
Q

______ is the crucial characteristic of monopolistic competition.

A

product differentiation.

61
Q

The typical monopolistic competitor

A

may compete on the basis of convenience, service, and ambience.

62
Q

Most firms in the US are monopolistic competitors.

A

most accurate statement

63
Q

Product differentiation is ____ based on real physical differences among products.

A

sometimes

64
Q

Product differentiation

A

takes place in the minds of the buyers.

65
Q

The typical monopolistic competior

A

may be a drugstore, restaurant, gas station, or dry cleaner.

66
Q

Monopolistic competition is similar to perfect competition for all of the following reasons except

A

both have identical demand and marginal revenue curves.

67
Q

Monopolistic competition may lead to each of the following except

A

peak efficiency

68
Q

In general, it is fair to say that Americans are provided with

A

a greater amount of product differentiation than people in most other countries.

69
Q

Corn from an Iowa cornfield vs. corn from an ILlinois cornfield is not an example of product differentiation.

A

…

70
Q

AN industry that has many firms producing a differentiated product would be classified as

A

monopolistically competitive

71
Q

Providing better service, ambience, or a convenient location are all forms of

A

product differentiation.

72
Q

Expensive blood tests in a medical lab for well-to-do medical patients is not an example of price discrimination.

A

..

Microeconomics (3 decks)

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