e12m2g Foldvary Econ 12 Mid2 studgvidilo

____ 1. Angelo is a wholesale meatball distributor. He sells his meatballs to all the finest Italian restaurants in town. Nobody can make meatballs like Angelo. As a result, his is the only business in town that sells meatballs to restaurants. Which of the following statements is true regarding the Meatball price relative to marginal cost?

____ 2. For a profit-maximizing monopolist, P has what relation to MR and MC?

______ 3. A monopoly maximizes profit by producing 500 units output (Q = 500). At that level of output, its marginal revenue is $30, its average revenue is $40, and its average total cost is $34. At Q = ???, the firm's marginal cost is

____ 4. A reduction in a monopolist's fixed costs would do what to price and profit?

____ 5. The collection of federal laws aimed at curbing monopoly power is called

____ 6. It is not uncommon to find that prescription drugs sell for more in the United States than they do in other countries. Which of the following statements about this issue is most likely to be true?

____ 7. When the government restricts the quantity of wheat to support a price floor, it is least costly to taxpayers for government to

______8 . Imagine a small town in which only two residents, Tony and Jill, own wells that produce water for safe drinking. Each Saturday, Tony and Jill work together to decide how many gallons of water to pump, bring the water to town, and sell it at whatever price the market will bear. Suppose that the marginal cost of water equals zero. The weekly town demand and total revenue schedule for water is in the table that will show Weekly Quantity, Price, Weekly Total Revenue. If the market for water was perfectly competitive instead of a monopolistic, how many gallons of water would be produced and sold?

____ 9. For the oligopolist that does not collude with its competitors , there are two factors that affect the decision to raise production. These factors are the

____ 10. During the 1990s, the members of OPEC operated independently from one another, causing the world market for crude oil to become close to what kind of market?

____ 11. In a two-person repeated game, a tit-for-tat strategy starts with ?? and then each player does what?

____ 12. Assume that Apple Computer has entered into an enforceable resale price maintenance agreement with Computer Super Stores Inc. (CSS Inc.) and Wal-Mart. Which of the following will always be true?

____ 13. Which of the following statements is false?

The Clayton Act allows triple damages in civil lawsuits in order to encourage lawsuits against conspiring oligopolists.

Many economists defend the practice of resale price maintenance on the grounds that it may help solve a free-rider problem.

Most economists agree that predatory pricing is a profitable business strategy that usually preserves market power.

The U.S. Supreme Court's view that the practice of tying usually allows a firm to extend its market power is not generally supported by economic theory.

____ 14. As new firms enter a monopolistically competitive market, profits of existing firms

____ 15. A monopolistically competitive market could be superficially considered inefficient, even though all things considered, it really may not be, because

____ 16. Who profits most from a monopoly?

____ 17. Advertising that conveys information about the existence of new products

____ 18. Critics of advertising argue that in some markets advertising may

____ 19. In the study done by Lee Benham on advertising for eyeglasses, advertising increased or decreased the average price or made no difference in price but changed quality or appeared to have no effect whatsoever?

____ 20. For the natural monopoly BART that increases the productivity of the area, the efficient way to finance it is

21. Consider two firms in the fast-food restaurant market. The content of advertisements for Firm B's product should do what?

____ 22. Assuming that oligopolists do not have the opportunity to collude, once they have reached the Nash equilibrium, it is always in their best interest to

____ 23. A monopolist faces the inverse demand function described by p= ?- ?q where q is output. The monopolist has no fixed cost and his marginal cost is ? at all levels of output. Which of the following expresses the monopolist's profit as a function of zher output?

____ 24. Firms in monopolistic competition do not maximize profit at minimum cost because