ECO Final Quiz

ECO Final Quiz Click Link Below To Buy: http://hwcampus.com/?s=ECO+Final+Quiz Contact Us: [email protected] 20. Factors that affect the ability of oligopolistic firms to successfully engage in cooperation include_________________. (Points : 1.25) a) number and size distribution of sellers b) size and frequency of orders c) product heterogeneity d) a and b only e) a, b, and c Question 21. 21. Joint products are: (Points : 1.25) a) products which are technically independent in the production process b) exemplified by beef and hide from cattle c) products whose production processes are interdependent d) a and b e) b and c Question 22. 22. In _________ price discrimination, the monopolist charges each consumer the highest price that purchaser is willing to pay for each unit purchased (provided that this price exceeds the marginal cost of production). (Points : 1.25) a) first-degree b) second-degree Question 23. 23. ___________ is a new product pricing strategy which results in a high initial product price. This price is reduced over time as demand at the higher price is satisfied. (Points : 1.25) a) Prestige pricing b) Price lining c) Skimming d) Incremental pricing e) None of the above Question 24. 24. ____________ is the price at which an intermediate good or service is transferred from the selling to the buying division within the same firm. (Points : 1.25) a) Incremental price b) Marginal price c) Full-cost price d) Transfer price e) none of the above Question 25. 25. For a monopolist that engages in price discrimination, when the price elasticity in market 1 is less (in absolute value) than in market 2, the optimal price in market 1 will exceed the optimal price in market 2. (Points : 1.25) a) Ture b) False Question 26. 26. To maximize profits, a monopolist that engages in price discrimination must allocate output in such a way as to make identical the_________in all markets. (Points : 1.25) a) ratio of price to marginal cost b) ratio of marginal cost to marginal utility c) ratio of price to elasticity d) marginal revenue e) none of the above Question 27. 27. The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as: (Points : 1.25) a) first-degree price discrimination b) market penetration c) third-degree price discrimination d) second-degree price discrimination e) none of the above Question 28. 28. Transfer pricing: (Points : 1.25) a) is typical of a centralized firm b) assumes no external sources available c) should maximize a division's profits, rather than the firm's d) can exist with or without an external competitive market e) none of the above Question 29. 29. A company sells 20,000 pairs of jeans a year at an average price of $10. Fixed costs are $60,000 and total variable costs are $120,000. They estimate that a 10% increase in output would not affect fixed cost but would reduce average variable costs by 40 cents. Someone suggests reducing price by 5% to increase sales and project. The price elasticity of demand (ARC) is -2. The impact on total revenue would be: (Points : 1.25) a) a decrease of $10,000 b) an increase of $10,000 c) an increase of $180,000 d) None above Question 30. 30. Given the information in (29) above. The change in total costs would be: (Points : 1.25) a) a decrease of $3,500 b) an increase of $ 3,800 c) an increase of $180,000 d) None above Question 31. 31. Given the information in (29) above. The effect on profit would be: (Points : 1.25) a) an increase of $42,000 b) a decrease of $6,200 c) an increase of 50,000 d) an increase of $6,200 e) None above Question 32. 32. An effective ceiling price would cause: (Points : 1.25) a) a surplus in the market b) a shortage in the market c) would not affect the market d) None above Question 33. 33. In the electric power industry, residential customers have relatively________ demands for electricity compared to industrial users and are generally charged _________ rate. (Points : 1.25) a) similar: similar b) elastic: lower c) elastic; higher d) inelastic; lower e) inelastic; higher Question 34. 34. To maximize profit, a monopolist that engages in price discrimination must allocate output in a way that makes _____ identical in all markets. (Points : 1.25) a) ratio of price to marginal cost b) ratio of marginal cost to price c) ratio of price to elasticity d) marginal revenue e) None above Question 35. 35. In the short-run a company (pure competitor) will stop production when: (Points : 1.25) a) total revenue is less than total costs b) price is less than average variable cost c) operating at a loss d) None above Question 36. 36. Which of the following is an example of an oligopolistic market structure? (Points : 1.25) a) Public utilities b) Airlines c) liquor retailers d) wheat farmers e) None above Question 37. 37. If a cartel wishes to maximize profits, the market share of each participant should be set at a level such that the _____ of all participants is identical. (Points : 1.25) a) average total cost b) average profit c) marginal cost d) marginal profit e) None above Question 38. 38. Effective collusion generally is more difficult as the number of oligopolistic firms involved increases (Points : 1.25) True False Question 39. 39. Capital budgeting does not provide for depreciation (Points : 1.25) a) True b) False Question 40. 40. To determine the benefit from a capital investment. The stream of future revenues must be discounted to their present value. (Points : 1.25) a) True b) False