Home
Economics MCQs
Managerial Economics
Quiz # 2, MCQs
-
1)
In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is
- A) greater than average total cost
- B) less than average total cost
- C) greater than average variable cost
- D) less than average variable cost
-
2)
A natural monopoly refers to a monopoly that is defended from direct competition by
- A) economies of scale over a broad range of output
- B) a government franchise
- C) control over a vital input
- D) a patent or copyright
-
3)
When a perfectly competitive industry is in long-run equilibrium, all firms in the industry
- A) earn zero economic profits
- B) produce a level of output where short-run marginal cost is equal to short-run average total cost
- C) produce a level of output where long-run marginal cost is equal to long-run average cost
- D) All of the above are correct
-
4)
The short-run supply curve of a perfectly competitive firm
- A) is equal to that portion of the short-run marginal cost curve that is above the average variable cost curve
- B) is equal to that portion of the short-run marginal cost curve that is above the average total cost curve
- C) is equal to that portion of the short-run average total cost curve that is above the average variable cost curve
- D) None of the above is correct.
-
5)
The long-run supply curve of a perfectly competitive firm
- A) is equal to that portion of the long-run marginal cost curve that is above the relevant short-run average variable cost curve
- B) is equal to that portion of the long-run marginal cost curve that is above the relevant short-run average total cost curve
- C) is equal to that portion of the long-run average total cost curve that is above the relevant short-run average variable cost curve
- D) None of the above is correct
-
6)
A depreciation of the U.S. dollar relative to foreign currencies will make
- A) foreign imports less expensive in the United States
- B) U.S. exports less expensive in foreign countries
- C) the demand for U.S. exports decrease
- D) All of the above are correct
-
7)
The value of the U.S. dollar on the foreign exchange market will tend to
- A) increase if there is an increase in the demand for U.S. exports by foreign countries
- B) decrease if there is an increase in the demand for foreign imports by the United States
- C) decrease if monetary authorities intervene on the foreign exchange market by selling U.S. dollars for foreign currencies
- D) All of the above are correct
-
8)
A monopolized market is in long-run equilibrium when
- A) zero economic profit is earned by the monopolist
- B) production takes place where price is equal to long- run marginal cost and long-run average cost
- C) production takes place where long-run marginal cost is equal to marginal revenue and price is not below long- run average cost
- D) All of the above are correct
-
9)
Which of the following types of firms is likely to be a monopolistic competitor?
- A) A local telephone company
- B) An automobile manufacturer
- C) A restaurant
- D) All of the above are likely to be monopolistic competitors
-
10)
A monopolist produces 14,000 units of output and charges $14 per unit. Its marginal revenue is $8, its marginal cost is $7 and rising, its average total cost is $10, and its average variable cost is $9. The monopolist should
- A) increase output, which will result in an increase in the firm's positive economic profit
- B) increase output, which will reduce the firm's economic losses
- C) shut down, which will reduce the firm's economic losses
- D) decrease output, which will result in an increase in the firm's positive economic profit
