Question 1

Which of the following is a legal right to control who may produce a good?

Accepted Answer

The answer of Which of the following is a legal...

Question 2

Consumers tend to accept the market restrictions imposed by suppliers because:

Accepted Answer

Consumers often find it more costly and difficult to organize against market restrictions than the suppliers do to maintain them, leading to acceptance of these restrictions.

Question 3

A rise in X-inefficiency:

Accepted Answer

X-inefficiency refers to the increase in costs due to inefficiencies within a firm, leading to a rise in the average total cost (ATC) curve.

Question 4

Refer to the graph shown.  Suppliers producing L will spend up to area(s) ________ to limit output to L.

Accepted Answer

The answer of Refer to the graph shown.  Suppliers...

Question 5

Refer to the graph shown.  If suppliers can reduce output from M to L, the remaining firms in the market that are still producing L will find that their revenues will rise by:

Accepted Answer

The answer of Refer to the graph shown.  If...

Question 6

Refer to the following graph.  Suppose this diagram represents a monopolist with a patent. What is the maximum the monopolist would be willing to spend to defend its patent?

Accepted Answer

The answer of Refer to the following graph.  Suppose...

Question 7

Refer to the following graph.  A monopolist's inefficiency per unit of output at the profit-maximizing level of output is limited to cost per unit:

Accepted Answer

The answer of Refer to the following graph.  A...

Question 8

Opening an industry to international competition tends to:

Accepted Answer

Opening an industry to international competition forces monopolists to become more efficient to survive against foreign competitors, reducing X-inefficiency.

Question 9

Suppose a lazy monopolist's fixed costs are higher than the fixed costs of an efficient monopolist. In all other respects the monopolists are the same. Which of the following statements about this lazy monopolist is true?

Accepted Answer

A monopolist's pricing and output decisions are based on marginal costs and marginal revenue, not fixed costs. Therefore, both monopolists would set the same price and quantity if their marginal costs and demand conditions are identical.

Question 10

Refer to the graph shown.  If suppliers can reduce output from M to L, the suppliers excluded from the market will lose the producer surplus shown by area:

Accepted Answer

The answer of Refer to the graph shown.  If...

Question 11

Suppliers would be less eager to organize to restrict output if they faced a:

Accepted Answer

Suppliers would be less eager to restrict output if they faced a more elastic demand because consumers would be more sensitive to price changes, leading to a significant drop in quantity demanded if prices were raised.

Question 12

Across the United States, fire departments are fighting with private companies over the right to respond to medical emergencies. Each side will fight harder the:

Accepted Answer

The more inelastic the demand, the more revenue can be generated from providing the service, making it more valuable for both fire departments and private companies to fight for the right to respond to medical emergencies.

Question 13

The text suggests that real-world competition is best seen as:

Accepted Answer

Real-world competition is best seen as a process because it involves ongoing interactions and adaptations among businesses and market participants, rather than a static state or something that requires government intervention to exist.

Question 14

One reason why our laws and social mores work against competition is:

Accepted Answer

Society often prioritizes goals such as equity, fairness, and stability, which can sometimes conflict with pure economic efficiency and competition.

Question 15

Refer to the graph shown.  If suppliers can reduce output from M to L, consumer surplus is reduced by area(s):

Accepted Answer

The answer of Refer to the graph shown.  If...

Question 16

Why is the perfect competition model unrealistic?

Accepted Answer

Perfect competition assumes that no individual can influence the market, but in reality, individuals often seek ways to limit competition to increase their own gains, making the model unrealistic.

Question 17

Suppose a lazy monopolist's fixed costs are higher than the fixed costs of an efficient monopolist. In all other respects the monopolists are the same. Which of the following statements about this lazy monopolist is true?

Accepted Answer

The lazy monopolist has higher fixed costs, which reduces its total profit compared to an efficient monopolist with lower fixed costs, assuming all other factors are equal.

Question 18

Suppliers would be the most eager to organize to restrict output if they faced:

Accepted Answer

Suppliers would be most eager to restrict output if they faced an inelastic demand because reducing supply would lead to a higher price and increased total revenue, as consumers are less sensitive to price changes.

Question 19

Suppose a lazy monopolist's fixed costs are lower than the fixed costs of an efficient monopolist. In all other respects, the monopolists are the same. Which of the following statements about this monopolist is true?

Accepted Answer

The lazy monopolist has lower fixed costs but operates the same way otherwise, so its pricing and output decisions remain unchanged, resulting in the same total revenue as the efficient monopolist.

Question 20

Refer to the graph shown.  If suppliers can restrict output from M to L, the price will:

Accepted Answer

The answer of Refer to the graph shown.  If...

Quiz 16: Real-World Competition and Technology

Which of the following is a legal right to control who may produce a good?

Consumers tend to accept the market restrictions imposed by suppliers because:

A rise in X-inefficiency:

Refer to the graph shown. Suppliers producing L will spend up to area(s) ________ to limit output to L.

Refer to the graph shown. If suppliers can reduce output from M to L, the remaining firms in the market that are still producing L will find that their revenues will rise by:

Refer to the following graph. Suppose this diagram represents a monopolist with a patent. What is the maximum the monopolist would be willing to spend to defend its patent?

Refer to the following graph. A monopolist's inefficiency per unit of output at the profit-maximizing level of output is limited to cost per unit:

Opening an industry to international competition tends to:

Suppose a lazy monopolist's fixed costs are higher than the fixed costs of an efficient monopolist. In all other respects the monopolists are the same. Which of the following statements about this lazy monopolist is true?

Refer to the graph shown. If suppliers can reduce output from M to L, the suppliers excluded from the market will lose the producer surplus shown by area:

Suppliers would be less eager to organize to restrict output if they faced a:

Across the United States, fire departments are fighting with private companies over the right to respond to medical emergencies. Each side will fight harder the:

The text suggests that real-world competition is best seen as:

One reason why our laws and social mores work against competition is:

Refer to the graph shown. If suppliers can reduce output from M to L, consumer surplus is reduced by area(s) :

Why is the perfect competition model unrealistic?

Suppose a lazy monopolist's fixed costs are higher than the fixed costs of an efficient monopolist. In all other respects the monopolists are the same. Which of the following statements about this lazy monopolist is true?

Suppliers would be the most eager to organize to restrict output if they faced:

Suppose a lazy monopolist's fixed costs are lower than the fixed costs of an efficient monopolist. In all other respects, the monopolists are the same. Which of the following statements about this monopolist is true?

Refer to the graph shown. If suppliers can restrict output from M to L, the price will: