WorksheetsTask Performance/Prefinal Examination
Total questions: 50
Worksheet time: 25mins
According to the economies of scale, how will an increase in production affect a monopoly firm?
there will be an increase in production costs
there will be a decrease in production costs
there will be an increase in income
there will be a decrease in income
Which of these would allow a government-created monopoly to form?
being able to produce goods at a lower cost
international trade
patents and copyright
merging of two(2) industry leaders
Which of these describes the demand curve for a monopoly firm?
horizontal line
vertical line
downward sloping
upward sloping
According to the price effect, what should monopoly firms do in order to sell more?
lower their prices
increase their prices
decrease product line
increase product line
What should the monopoly firm do if marginal cost is less than marginal revenue?
decrease production
increase production
increase investment
decrease investment
Which of these is a way to regulate the behavior of monopolies?
boycotting the monopoly
allowing the monopolist to charge a lower price than marginal cost
subsidizing the monopolist
encouraging mergers
In a monopoly, which of these is the graphical representation of the ideal price?
highest point in marginal revenue curve
lowest point in marginal cost curve
intersection of demand and supply curve
intersection of marginal revenue and marginal cost
In a perfect price discrimination, which price would the seller choose to sell the good?
the highest price that he/she can obtain
the price that the customer wants
the price that covers all production costs
the price that the customers is willing to pay
Which of these is the most common form of price discrimination?
linear price discrimination
first-degree price discrimination
second-degree price discrimination
third-degree price discrimination
Why do deadweight losses occur?
the firm's costs are increasing
marginal revenue is higher than marginal cost
demand and supply are not in equilibrium
the firm is using price discrimination
Which of these would happen if a monopoly firm produces more?
demand would increase
demand would decrease
competitors will enter the market
competitors will exit the market
Which of the following is the profit maximization equation of the monopoly?
P>MR = MC
P<MR<MC
P=MR=MC
P=MR>MC
Which of these is an example of non-linear pricing?
bidding
student discounts
bulk discounts
reservation price
Which of the following is NOT included when analyzing how monopolies maximize profit?
supply curve
demand curve
marginal revenue curve
marginal cost curve
What are the two (2) effects of a price increase in a monopoly?
price effect and cost effect
output effect and production effect
cost effect and production effect
price effect and output effect
Advertising costs are variable costs.
True
False
Monopolistic competition does not have a deadweight loss.
True
False
Advertising increases demand.
True
False
In a monopolistic competition, firms produce goods that are highly substitutable to each other
True
False
The free entry and exit of firms would cause the monopolistically competitive firms to earn above average profits.
True
False
Exiting the monopolistically competitive market would cause demand to rise.
True
False
In the long run of a monopolistically competitive firm, price equals average total revenue.
True
False
Each firm in a monopolistically competitive market is like a monopoly.
True
False
In the long run of a monopolistically competitive market, there are many firms.
True
False
A monopolistically competitive firm will be inefficient if the number of firms is not ideal.
True
False
A firm with an established brand name is able to charge a higher price for the product.
True
False
It is more profitable for a monopolistically competitive firm to eliminate excess capacity
True
False
Brand names can be used as a tool to assure customers that the firm has high quality.
True
False
A monopolistically competitive firm has a horizontal demand curve.
True
False
If there is high product development in a monopolistically competitive firm, their marginal revenue will exceed marginal cost.
True
False
Which of these is NOT a natural barrier to entry in an oligopoly?
ownership of a key resource
high setup costs
high research and development costs
strong branding
In an oligopoly, what would happen if firms increase production?
prices will decrease
prices will increase
buyers will increase
buyers will decrease
Which of these is NOT a purpose of a cartel?
limit output
limit resources
increase price
raise economic profit
Which of these is the primary competition policy of the Philippines?
RA10883
RA 10916
RA 10667
RA 10669
Which of these is allowed under PCA?
price fixing
market dominance
bid rigging
output limitation
What does the PCC stand for?
Philippine Competitive Commission
Philippine Competition Commission
Philippine Corporate Commission
Philippine Corporation Commission
Which of these is NOT a PCC mandate
decide on mergers and acquisitions
monitor competition in the market
revise the PCA
impose sanctions and penalties
In this practice, the manufacturer agrees with a distributor on the price the product will be resold.
tying arrangement
predatory pricing
market sharing
vertical price fixing
Which of these is NOT a feature of a prisoner's dillemma game?
rules
strategies
conditions
payoffs
Which of these is NOT a characteristic of a monopolistic competition firm?
there are many sellers
firms sell differentiated products
there is free entry and exit
prices are set by the buyer
Which of these is the profit maximization equation of the monopolistic competition firm in the short run?
MR=MC
MR=P
MR<MC
MR<P
Which of these is the equation for the economic profit?
variable cost + fixed cost
marginal revenue - marginal cost
accounting profit + opportunity cost
revenue - total cost
When new firms enter the monopolistic competition market, which of the following obtains a positive externality?
competitors
customers
government
suppliers
Which of these CANNOT be used by the firm to signal their product's quality?
brand name
costing
advertising
packaging
Which of these is the production quantity that minimize the average total cost of the firm?
efficient scale of the firm
minimum cost requirement
cost saving production
effective production rate
Which of these describes the price of monopolistice competition?
it is above marginal revenue
it is above marginal cost
it is below marginal revenue
it is below marginal cost
Which of these is NOT a possible effect of advertising?
promotes brand quality
incentive to maintain quality
lowers prices
stops product development
How do increasing profits affect monopolistic competition firms in the long run?
firms will exit the market
firms will develop fewer products
firms will enter the market
firms will increase costs
To earn a profit in the short run, how should the monopolistic competition firm set its price?
equal to marginal cost
equal to average cost
above marginal cost
above average cost
What would happen if there is an artificial supply shortage in the markets?
consumers will pay higher prices for goods
firms will innovate more goods
sales will be limited to a certain area
more firms will enter the market
