1. Which of the following is true at the profit maximizing quantity for both a perfectly competitive firm and a monopoly?
a. Price equals marginal cost.
b. Price is greater than marginal cost.
c. Marginal revenue equals marginal cost.
d. Marginal revenue is less than marginal cost.
2. For a monopolist that produces in the short run and does not price discriminate, price always has to be
a. equal to marginal cost at the profit maximizing quantity
b. equal to marginal revenue at the profit maximizing quantity
c. greater than marginal cost at the profit maximizing quantity
d. less than marginal cost at the profit maximizing quantity
3. An important difference between a perfectly competitive firm and a monopolist is that
a. the perfectly competitive firm tends to be larger
b. only the monopolist attempts to maximize profit
c. only the perfectly competitive firm maximizes profit
d. the perfectly competitive firm faces a horizontal demand curve and the monopolist faces a downward sloping demand curve
4. Unlike firms in a perfectly competitive industry, monopolists have control over
a. the price they charge for the product
b. the quantity of output they produce
c. the prices they pay for resources
d. the quantities of various resources which are used
e. improvements in technology
5. The term monopolistic competition
a. denotes an industry with one seller of many differentiated products
b. is an alternate expression for monopoly
c. denotes an industry with many sellers of homogeneous products
d. denotes an industry with many sellers of differentiated products
6. Which of the following characteristics distinguishes oligopoly from other market structures?
a. production of differentiated outputs
b. interdependence among firms in the industry
c. a downward sloping demand curve
d. production of homogeneous outputs
7. Interdependent decision making on price, quality, or advertising is characteristic of
a. perfect competition
d. monopolistic competition
8. Under which of the following market conditions is it most difficult to maintain a cartel agreement?
a. There are many firms in the industry and these firms have similar costs.
b. There are many firms in the industry and these firms have different costs.
c. There are few firms in the industry and these firms have similar costs.
d. There are few firms in the industry and these firms have different costs.
9. Game theory focuses on
a. strategic behavior among interdependent firms
b. professional athletic events
c. competition between the players in board games
d. competition between those in the political arena and those in the market place
10. The term strategy in terms of game theory refers to
a. the relationship between price and marginal cost
b. the relationship between individual firm demand curves and the market demand curve
c. each firm s game plan in making decisions
d. the interrelationship between price and marginal revenue