ECO 405 Week 7 Quiz

8/20/2019 ECO 405 Week 7 Quiz

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ECO 405 Week 7 Quiz – Strayer

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htt%&''(u#a%%)net'ECO*405*Week*7*Quiz*Strayer*4+7)ht,

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he Econo,ics O1 $ono%oly Power& Can $arkets Be Controlle#2

$ulti%le Choice Questions

1. Imperfect Competition Can Best Be Described As A Situation In WhichA. A Few Large Firms Produce And Se A Particuar ProductB. !an" Firms Produce And Se A ProductC. #n" #ne Firm Produces And Ses A ProductD. Firms $%ercise Some !onopo" Power $. Both &A' And &D'

(. )he !onopo" Power #f A Firm Can Be !easured B" )he Firm*sA. Profits +eati,e )o #ther Firms In )he Industr"B. Contro #,er )he Demand For Its Product

C. +e,enues As A Percent #f Industr" +e,enuesD. Prices Compared )o A,erage Prices In )he Industr"$. Contro #,er )he !ar-et Supp" #f Its Product

. Which #f )he Foowing Is Li-e" )o /a,e )he !ost !onopo" Power0A. Ford !otor CorporationB. our Loca Water Compan"C. !obi #i CorporationD. A,on Products &Cosmetics'$. A Fast Food +estaurant

2. Concentration +atios Are 3sed )o !easure )heA. Potentia !onopo" Power Within An Industr"B. Strength #f )he Demand For An Industr"*s ProductC. Potentia !onopo" Power #f A FirmD. Degree #f Competition Between Firms In Different !ar-ets$. Le,e #f Perfection In A Competiti,e !ar-et

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8/20/2019 ECO 405 Week 7 Quiz


4. Suppose )he 3.S. Auto Industr" Ses 15666 Autos Per ear. #f )his5 7m Ses 2665Ford 665 And Dodge (46. 7i,en )his Information5 )he Four8Firm Concentration+atio #f )he Industr" !ust Be At LeastA. 94:

B. 4:C. 46:D. 166:$. Cannot )e Without Further Information

;uestions 6< 8 6= +efer )o )he )abe Beow.

<. )he 28Firm Concentration +atio In )his Industr" IsA. 6.4

B. 6.<C. 6.>D. 6.=$. 6.9

>. )he <8Firm Concentration +atio In )his Industr" IsA. 6.<B. 6.>

C. 6.=D. 6.9$. 1.6

8/20/2019 ECO 405 Week 7 Quiz


=. Assume )hat ?o Firm In )his Industr" Accounts For Less )han 4: #f Industr"Saes. What Is )he Largest ?umber #f Firms )hat Coud Be In )his Industr"0A. <B. >

C. =D. 9$. 16

9. Which #f )he Foowing Woud Cause An Industr"*s Concentration +atio )o !a-eIt Appear Less Competiti,e )han It +ea" Is0A. Firms In )he Industr" Are Located In #ne Area #f )he Countr"B. )ransporting )he Industr"*s #utput Is @er" $as"

C. Foreign Firms $%port )he Industr"*s Product )o )he 3nited StatesD. /igh Barriers )o $ntr"$. A #f )he Abo,e

16. A Pure !onopo" Industr" /as A 28Firm Concentration +atio $ua )oA. 6B. 6.(4C. 646D. 6.9

$. 1.6

11. )o !a%imie Profits5 A !onopoist Produces )he #utput Le,e At WhichA. Its )ota +eceipts Are 7reatestB. Its )ota Costs Are !inimumC. Its !argina Cost $uas Its !argina +e,enueD. Its )ota Costs $ua Its )ota +eceipts$. ?one #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


1(. )o !a%imie Profits5 A Competiti,e Firm Produces )he #utput Le,e At WhichA. Its )ota +eceipts Are 7reatestB. Its )ota Costs Are !inimumC. Its !argina Cost $uas Its !argina +e,enue

D. Its )ota Costs $ua Its )ota +eceipts$. ?one #f )he Abo,e

1. #ne Difference Between A Competiti,e Seer And A !onopoistic Seer Is )hat)heA. Competiti,e Firm Faces A /orionta Supp" Cur,eB. !onopoist )ries )o !a%imie ProfitC. !onopoist /as Some Price Setting Abiit"

D. Competiti,e Firm Is Free )o @ar" #utput$. !ar-et Demand Cur,e Is Positi,e" Soped For A !onopo"

12. !onopo" +efers )oA. A Large FirmB. A Firm )hat Is #ne #f A Few Firms In An Industr"C. A Singe Seer #f A Product For Which )here Are ?o 7ood SubstitutesD. A Firm )hat +efuses )o Lower Its Price$. A #f )he Abo,e

14. In A Competiti,e !ar-et5 )he Singe FirmA. Competes With #ther Firms For Its Share #f )he !ar-etB. Is 3nabe )o +aise )he Price #f )he ProductC. Can Increase Its Saes B" Ad,ertisingD. Can Increase Its Saes B" Lowering Its Price$. Is A #f )he Abo,e

1<. A !aor #becti,e #f Firms In A )"pes #f !ar-et Structures IsA. #utput +estrictionB. #utput !a%imiationC. )o +aise PricesD. Profit !a%imiation$. )o !a%imie +e,enues

8/20/2019 ECO 405 Week 7 Quiz


1>. A Firm*s )ota +e,enue $uas ItsA. Income !inus $%pensesB. Pre8)a% ?et IncomeC. Income For )a% Purposes

D. ;uantit" )imes Price$. ;uantit" )imes Costs

1=. Profit $uasA. )ota +e,enue !inus )ota CostB. !argina +e,enue !inus !argina CostC. ;uantit" )imes PriceD. !argina Cost !inus !argina +e,enue

$. Income !inus #pportunit" Cost

19. Profits And Losses In A Pri,ate $nterprise $conomic S"stemA. Contribute )oward A Brea-down #f )he S"stemB. Lead )o A !onopoiation #f )he Industries In Which )he" #ccur C. Show Where Producti,e Capacit" Shoud Be $%panded And Where It Shoud BeContractedD. Do A #f )he Abo,e$. Do Both &A' And &B'

(6. For A Firm5 At )he #utput Le,e At Which !argina +e,enue $uas !arginaCost5A. Profits Are /ighestB. )here Is ?either 3nempo"ment ?or InfationC. #utput Is !a%imiedD. +e,enues Are !a%imied$. Costs Are !inimied

(1. )he !ost Common Forms #f ?onprice Competition AreA. Profit !a%imiation And Loss !inimiationB. !onopoiation And #utput +estrictionC. Ad,ertising And Changes In Product ;uait" And DesignD. Infation And 3nempo"ment$. ?one #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


;uestions ((8(< +efer )o )he Foowing 7raph. For $ach ;uestion5 Disregard An"Irree,ant Lines.

((. Suppose )he !ar-et Is Competiti,e. $uiibrium !ar-et Price And #utput WiBeA. P15 (

B. P(5

C. P5 1

D. P15 2

$. P5 (

(. ?ow Suppose )he Same !ar-et Is !onopoied. $uiibrium !ar-et Price And#utput Woud BeA. P5 1

B. P5 (

C. P(5

D. P15 (

$. P15 2

8/20/2019 ECO 405 Week 7 Quiz


(2. )he Area #f )he )riange Abc +efects )heA. Dead8Weight Wefare Loss Due )o !onopo"B. Increase In Production Costs Due )o !onopo"C. Increase Price )o )he Consumer Due )o !onopo"

D. Impact #f Barriers )o $ntr" #n )he !ar-et$. $ffect #f !onopo" #n Income Distribution

(4. If )his Industr" Changes From Pure Competition )o !onopo"5 #utput ChangesFromA. 2 )o 1

B. 2 )o (

C. ( )o 2

D. )o (

$. ( )o

(<. If )his Industr" Changes From Pure Competition )o !onopo"5 Price ChangesFromA. P )o P(

B. B. P )o P1

C. C. P( )o P1

D. D. P1 )o P

$. $. P( )o P

(>. If )he Demand Cur,e Faced B" A Firm Is Downward Soping And )he !ar-etPrice #f )he Product Is Abo,e !argina Cost #f Production5 Which #f )heFoowing Is Correct0A. ?ot $nough #f )he $conom"*s +esources Are Being Aocated )o Producing )he7oodB. )oo !uch #f )he $conom"*s +esources Are Being Aocated )o Producing )he

7oodC. )he Firm Is In A Competiti,e !ar-etD. )he Firm Is !a-ing Profits$. )he Firm Is Losing !one"

8/20/2019 ECO 405 Week 7 Quiz


(=. A !onopo" Is ?ot $fficient BecauseA. Price $%ceeds !argina CostB. $ntr" Into )he !ar-et Is Boc-edC. #utput Is )oo LargeD. !onopo" Is Iega

$. Price Is )oo Low

8/20/2019 ECO 405 Week 7 Quiz


(9. )he Dead8Weight Wefare Loss Due )o !onopo" IsA. )oo Sma )o Be ImportantB. About 16: #f 7dp Per ear C. 3nabe )o Be Determined In A Compe% $conom" Such As #ur #wn

D. About 1: #f 7dp Per ear $. About .61: #f 7dp Per ear

6. )he Dead8Weight Wefare Loss Due )o !onopo"A. +esuts From )he !onopoist*s )endenc" )o +educe #utput Beow )heCompetiti,e Le,eB. Is A !easure #f )he Cost )o Societ" From )he !onopoistic !isaocation #f+esources

C. Is $stimated )o Be About 1: #f 7dp Per ear D. Is A Loss )o Consumers ?ot #ffset B" An"one $se*s 7ain$. A #f )he Abo,e

1. !onopoiation #f A Pre,ious" Competiti,e !ar-et Leads )oA. +educed Production And Product ;uait" And Increased Costs And PricesB. Increased Production And /igher PricesC. Increased Production5 Product ;uait" And PricesD. 7o,ernment +eguation

$. ?one #f )he Abo,e

(. Patents And Cop"right LawsA. Are 7o,ernmenta Barriers )o !ar-et $ntr"B. $ncourage #rder" !ar-et $ntr"C. Discourage +esearch And De,eopmentD. +educe !onopo" Power $. Do A #f )he Abo,e

. When Firms $arn Profits5A. )he" Wi Li-e" $%pandB. ?ew Firms Wi /a,e An Incenti,e )o $nter )he !ar-etC. )he" Are Pro,iding A 7ood #r Ser,ice )hat Consumers Want !ore #f D. )he !ar-et Is Signaing !ore Firms )o $nter $. A #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


2. In A Competiti,e !ar-et In )he Short +un5 FirmsA. !a" $arn Profits #r LossesB. Awa"s Brea- $,enC. $arn ?either Profits ?or Losses

D. !ust Be Free )o $nter #r $%it )he !ar-et$. Charge A /igh Price And Produce A Low ;uantit"

;uestions 4 8 9 +efer )o )he 7raph Beow5 Which Is For A Firm In A Competiti,e!ar-et.

4. Since )his Is A Competiti,e !ar-et5 )he Firm*s !argina +e,enue IsA. E4B. E>C. E(6

D. E166$. E146

8/20/2019 ECO 405 Week 7 Quiz


<. )he Profit8!a%imiing Price And ;uantit" For )his Competiti,e Firm AreA. E4 And 166B. E4 And 146C. E> And 166

D. E> And 146$. E> And !ore )han 146

>. $uiibrium Price And ;uantit" In )he !ar-et AreA. E4 And 166B. E4 And 146C. E> And 146D. E> And !ore )han 146


=. )he Firm*s )ota +e,enue IsA. E4B. E>C. E166D. E146$. E466

9. If )he Firm /as A )ota Cost #f E2665 It Is $arning AA. Profit #f E6B. Profit #f E166C. Loss #f E166D. Loss #f E(66$. Loss #f E466

8/20/2019 ECO 405 Week 7 Quiz


;uestions 26 8 22 +efer )o )he 7raph Beow5 Showing A !onopo" !ar-et.

26. For )he Firm Shown #n )he 7raph5 Profit !a%imiation #ccurs At What PriceAnd ;uantit"0A. E(6 And 46B. E14 And >6C. E14 And 46

D. E16 And 46$. E16 And >6

21. At )he Profit !a%imiing ;uantit"5 )he Firm*s )ota +e,enue $uasA. E16B. E14C. E(6D. E15666$. E15266

8/20/2019 ECO 405 Week 7 Quiz


2(. If )he Firm /as )ota Costs #f E15(66 At )he Profit !a%imiing #utput5 )hen ItIs $arning AA. Profit #f E6B. Profit #f E166

C. Profit #f E(66D. Loss #f E166$. Loss #f E(66

2. If )his Were A Perfect" Competiti,e !ar-et5 $uiibrium Price And ;uantit"Woud BeA. E(6 And 46B. E14 And >6

C. E14 And 46D. E16 And 46$. E16 And >6

22. !onopoiation #f )his !ar-et Leads )o A Deadweight Loss $ua )oA. E6B. E46C. E166D. E146

$. Cannot Be Determined

24. If A Firm Ses 166 3nits #f #utput At A Price #f E4 And $ach 3nit Costs E )oProduce5 )he Firm Is $arning AA. Profit #f E(66B. Loss #f E( Per 3nitC. Loss #f E(66D. Profit #f E466

$. Loss #f E66

2<. Which #f )he Foowing Is #f A Firm*s )ota Costs0 )he"A. Do ?ot Incude #pportunit" CostsB. Become Lower As !ore Is ProducedC. Are 7reater )han )ota +e,enue When )he Firm Is $arning A ProfitD. Are $ua )o )he Cost Per 3nit )imes )he ?umber #f 3nits Produced$. A #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


2>. If A Firm Ses 166 3nits #f #utput At A Price #f E4 And $ach 3nit Costs E )oProduce5 )he Firm*s )ota +e,enue $uasA. EB. E4

C. E(66D. E66$. E466

2=. A Perfect" Competiti,e Firm*s Supp" Cur,e Is ItsA. Demand Cur,eB. !argina +e,enue Cur,eC. )ota +e,enue Cur,e

D. !argina Cost Cur,e$. )ota Cost Cur,e

29. )he Supp" Cur,e For A !onopo"A. Is Its !argina +e,enue Cur,eB. Is Its )ota +e,enue Cur,eC. Is Its !argina Cost Cur,eD. Is Its )ota Cost Cur,e$. Does ?ot $%ist

46. )he Demand Cur,e For AA. !onopo" Firm Is Downward SopingB. !onopo" Industr" Is Downward SopingC. Perfect" Competiti,e Firm Is /oriontaD. Perfect" Competiti,e Industr" Is Downward Soping$. A #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


41. If A Firm Ses 166 3nits At A Price #f E4 And $ach 3nit Costs E )o Produce5Its )ota Cost $uasA. EB. E4

C. E(66D. E66$. E466

;uestions 4( 8 4< +efer )o )he 7raph Beow.

4(. If )his Industr" Is Perfect" Competiti,e5 $uiibrium Price And #utput In )he!ar-et Wi BeA. E1< And 16

B. E1( And 16C. E1( And 12D. E= And 12$. E= And 16

8/20/2019 ECO 405 Week 7 Quiz


4. If )his Industr" Is A !onopo"5 $uiibrium Price And #utput In )he !ar-et WiBeA. E1< And 16B. E1( And 16

C. E1( And 12D. E= And 12$. E= And 16

42. If )his Industr" Starts As Perfect" Competiti,e And )hen Becomes A !onopo"5!ar-et Price Wi Change FromA. E1< )o E1(B. E1< )o E=

C. E1( )o E=D. E= )o E1<$. E1( )o E1<

44. If )his Industr" Starts As Perfect" Competiti,e And )hen Becomes A !onopo"5)he Deadweight Loss )o Societ" Is $ua )o AreaA. AbcB. AdcC. Bdec

D. Adec$. ?one #f )he Abo,e

4<. Societ"*s ?et Benefits Are !a%imied When Price And ;uantit" In )he !ar-etAreA. E1< And 16B. E1( And 16C. E1( And 12

D. E= And 12$. E= And 16

8/20/2019 ECO 405 Week 7 Quiz


4>. Which #f )he Foowing Is A Pri,ate Barrier )o $ntr"0A. An #ccupationa LicenseB. A PatentC. #wnership #f +aw !aterias

D. A +eguator" Commission$. A #f )he Abo,e

4=. Which #f )he Foowing Is A 7o,ernment Barrier )o $ntr"0A. An #ccupationa LicenseB. #wnership #f +aw !ateriasC. Product DifferentiationD. Ad,ertising

$. A #f )he Abo,e

49. Which #f )he Foowing Is A Barrier )o $ntr"0A. Import +estrictionsB. Cop"right LawsC. $%cusi,e FranchisesD. oning #rdinances$. A #f )he Abo,e

<6. Firms !a" Ad,ertise )heir Products In #rder )oA. Create A Barrier )o $ntr"B. Pro,ide Consumers With InformationC. Increase Demand For )heir ProductD. Differentiate )heir Product$. Do A #f )he Abo,e

<1. A )eephone Is !uch !ore 3sefu )o A Consumer When #ther Peope Aso /a,e)eephones. )his Iustrates Which #f )he Foowing Concepts0A. $conomies #f ScaeB. Diseconomies #f ScaeC. ?atura !onopo"D. ?etwor- $conomies$. Constant +eturns )o Scae

8/20/2019 ECO 405 Week 7 Quiz


<(. Which #f )he Foowing Is An $%ampe #f ?onprice Competition0A. Ad,ertisingB. Changing )he Design #f A ProductC. Incorporating ?ew )echnoog" In A Product

D. Impro,ing )he ;uait" #f A Product$. A #f )he Abo,e

<. )he Loss )o Societ" Caused B" !onopo" Power !a" Be 7reater )han Simp")he Losses Associated With Deadweight Losses Because It Aso Incudes Losses Due)oA. Pri,ate Barriers )o $ntr"B. 7o,ernment Barriers )o $ntr"

C. $%tensi,e Product DifferentiationD. #ccupationa Licensing$. A #f )he Abo,e

<2. With A ?atura !onopo"5A. )he Long8+un A,erage Cost Cur,e #f )he Firm Decines #,er )he +ange #fProductionB. 7o,ernment +eguation $nsures )hat Consumer*s Interests Wi Be Ser,edC. 7o,ernment +eguation Wi Fai

D. )here Are ?o Significant $conomies #f Scae In Producing )he 7ood$. ?one #f )he Abo,e

<4. )he 7o,ernment*s +eguation #f PoutionA. Is Gustified Because #f ?atura !onopo"B. Is Gustified B" Poor" Defined Propert" +ightsC. Is Gustified B" Concentration +atiosD. Is ?ot Li-e" )o Impro,e #n )he !ar-et #utcome

$. Cannot Be Defended #n $conomic 7rounds

8/20/2019 ECO 405 Week 7 Quiz


<<. )he Capture )heor" #f +eguation SuggestsA. In )he Absence #f +eguation5 Consumer Wefare Is #ften Captured B" Firms In)he !ar-etB. )he Lost Consumer Wefare Due )o 3nfair Business Practices Can Be #ffset

)hrough 7o,ernment +eguationC. When !ar-et Faiure $%ists5 +eguation Is AppropriateD. )he +eguators #f An Industr" Are #ften HCapturedH B" )he Firms In )he !ar-et$. ?one #f )he Abo,e

<>. Which #f )he Foowing Is Li-e" )o +educe !onopo" Power In )he 3nitedStates )he !ost0A. Pacing An Absoute Limit #n )he )ota Assets )hat An" #ne Compan" Can /a,e

B. +emo,ing A 7o,ernment8Imposed $ntr" Barriers )o Industries And #ccupationsC. Pacing A 7o,ernment Ban #n )ee,ision Ad,ertisingD. Pacing A Specia )a% #n !onopoists* #utputs$. ?one #f )he Abo,e

<=. Which #f )he Foowing Pro,ides )he Strongest $conomic Gustification For+eguation0A. ?atura !onopo"B. $%cess Consumer Information

C. Shortages And /igh PricesD. A #f )he Abo,e$. ?one #f )he Abo,e

<9. )he Best $stimate #f )he Dead8Weight Wefare Loss Due )o !onopo" Is BiasedDownward Because It Does ?ot )a-e Into AccountA. +eductions In Product ;uait"B. /igher Costs #f Production

C. Decreases In Product @ariet"D. A #f )he Abo,e$. ?one #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


;uestions >6 8 > +efer )o )he 7raph Beow.

>6. At What Le,e #f #utput Does )he Firm $%perience $conomies #f Scae0A. 6B. 6 8 ;6

C. ;6

D. Abo,e ;6

$. )his Firm Does ?ot $%perience $conomies #f Scae

>1. Increasing #utput Be"ond ;6 Wi Cause )he Firm )o $%perienceA. $conomies #f ScaeB. Diseconomies #f ScaeC. Constant +eturns )o ScaeD. ?etwor- $conomies$. Decreasing )ota Costs

>(. At What Le,e&S' #f #utput Do +eductions In )he A,erage Costs #f ProductionCease0A. 6B. 6 8 ;6

C. ;6

D. Abo,e ;6

$. )here Are ?o +eductions In )he A,erage Costs #f Production

8/20/2019 ECO 405 Week 7 Quiz


>. It Is Cheaper Per 3nit )o Produce /igher ;uantities When #utput IsA. /ighB. Between 6 And ;6

C. ;6

D. Abo,e ;6

$. Decreasing

>2. Which #f )he Foowing Is A ?egati,e Conseuence #f Aowing Competition InAn Industr" )hat Is A ?atura !onopo"0A. Deadweight Wefare LossB. Lower PricesC. +estricted #utput

D. /igher A,erage Costs$. A #f )he Abo,e

>4. Which #f )he Foowing Is A ?egati,e Conseuence #f Aowing An3nreguated ?atura !onopo"0A. Deadweight Wefare LossB. /igher PricesC. +estricted #utputD. A #f )he Abo,e


><. CorporationsA. Are Lega $ntities Separate From )heir #wnersB. Are #wned B" Stoc-hodersC. Finance )heir #perations )hrough !an" Sma In,estorsD. Account For (6: #f A Businesses In )he 3nited States$. A #f )he Abo,e

8/20/2019 ECO 405 Week 7 Quiz


>>. Appro%imate" What Percent #f Saes In )he 3nited States Are !ade B"Corporations0A. 26B. 46

C. <6D. >6$. 96

>=. )he HAgenc" ProbemH Is Caused B"A. Corporate !anagers Pursuing 7oas Different From Stoc-hoder*s 7oasB. Stoc-hoders Attempting )o !icromanage CorporationsC. +eguator" Agencies Interfering With Corporate #perations

D. Sudden Decines In Stoc- Prices$. #,er8In,estment In ?ew Capita

>9. A 7uarantee )hat Aows )he Purchase #f Shares #f Stoc- At A Fi%ed Price IsA&?'A. ?on8Pecuniar" Benefit #f $mpo"mentB. Stoc- #ptionC. Disincenti,e )o $%pand A CorporationD. Iega !eans )o Compensate Ceos

$. Stoc- Spit

=6. Some Woud Argue )hat #ne #f )he Primar" Benefits #f Possessing A!onopo" IsA. )he Chance )o $rect $ntr" BarriersB. )he #pportunit" )o Li,e )he ;uiet LifeC. )he Abiit" )o +estrict #utputD. )he Chance )o Create Deadweight Losses

$. )he Abiit" )o Gac- 3p Prices )o Consumers

=1. )here Is )he Possibiit" )hat )he Sheer Sie #f Some Firms)heir JBignessK Is A Probem For An $conom" BecauseA. Big Firms Possess Larger $ntr" BarriersB. Bigness Impies )hat )he Peope Who +un Such Firms Are 3nethicaC. Bigger Firms Are !ore InefficientD. )he $ffects )hat )he Faiure #f Large Firms Can /a,e #n )he 3s $conom"

$. )he ?umber #f Shares #f Stoc- )hat Are )raded In Large Firms

8/20/2019 ECO 405 Week 7 Quiz


=(. )he 3s 7o,ernment In (66= Did ?ot Step Into )he !ar-et )o Bai #ut WhichFirm0A. Chr"ser B. 7enera !otorsC. Ford

D. Aig$. )he 7o,ernment Stepped In )o Bai #ut A #f )hese Firms

rue ' 3alse Questions

=. Firms With !onopo" Power ied /igher )han A,erage +eturns )o In,estors.

=2. )he !onopo" Power #f A Firm In An Imperfect" Competiti,e !ar-et Is 7reater )he Larger )he Firm*s #utput +eati,e )o )he Industr" #utput.

=4. )he !ore Seers )here Are In5 )he Less Contro An" #ne Seer /as #,er )hePrice It Can Charge.

=<. Shortages Are Important $,idence )hat Firms Are $%ercising !onopo" Power.

=>. A Four8Firm Concentration +atio #f 6.9 Indicates )hat )he Four Largest Firms In)he Industr" Contro 96: #f )he Industr"*s Saes.

==. In A Perfect" Competiti,e Industr" )he Four8Firm Concentration +atio Is Cose)o ero.

8/20/2019 ECO 405 Week 7 Quiz


=9. Concentration +atios Pro,ide A 7ood !easure #f A Firm*s Potentia For$%ercising !onopo" Power.

96. Ford !otors !ore Cose" +esembes A !onopo" )han Does our Loca$ectric Compan".

91. Concentration +atios )end )o Be Biased Downward Because )he" Do ?otAccount For Internationa Competition.

9(. Profit !a%imiation As An #becti,e #f A Firm Is A Logica $%tension #f )he7enera Principe )hat Peope Prefer !ore )o Less.

9. Seers In A Competiti,e !ar-et !ust )a-e Into Account What Bu"ers Wi Do

And )hose In )he !onopoied !ar-et Do ?ot.

92. 7enera" !onopoists Wi Be !ore Concerned With Profit !a%imiation AndCompetiti,e Firms Wi Be !ore Concerned With $arning A Fair +ate #f +eturn #nIn,estment.

94. )o !a%imie Profits A Firm )ends )o Produce An #utput Le,e At Which Its!argina +e,enue $uas Its !argina Costs.

9<. !argina +e,enue For A !onopoist Is Less )han )he Price It Charges For ItsProduct.

8/20/2019 ECO 405 Week 7 Quiz


9>. !argina +e,enue For A Competiti,e Firm Is $ua )o )he Price It Charges ForIts Product.

9=. If Its !argina +e,enue Is Less )han Its !argina Cost5 A Firm Shoud +educe Its#utput Product.

99. Li-e #ther Demand Cur,es5 )he Demand Cur,e Facing A Competiti,e FirmSopes Downward.

166. A Firm )hat Ses In A Competiti,e !ar-et +estricts #utput And Charges/igher Prices )han It Woud If It Were A !onopoist.

161. Profits Ser,e ?o 3sefu Purpose In A Pri,ate $nterprise $conom" And ShoudBe )a%ed Awa" B" )he 7o,ernment.

16(. A Firm In A Competiti,e !ar-et /as ?o Price Setting Capabiit".

16. Some !onopoists Boc- $ntr" Into )heir !ar-ets )hrough )heir Contro #f)he +aw !aterias ?eeded )o Produce )he Product.

162. Licensing #f Barbers Insures )hat We Wi 7et Better /aircuts At )he SamePrices #r )he Same ;uait" #f /aircuts At Lower Prices.

8/20/2019 ECO 405 Week 7 Quiz


164. Licensing #f !.D.*S /as ?othing )o Do With )he Fact )hat )he" Are Among)he $conom"*s /ighest Paid Professionas.

16<. Changes In )he Design And ;uait" #f A Product #ften +esuts In 7reaterConsumer Satisfaction From )he Product.

16>. !onopo" Power In )he 3.S. Does ?ot Pose A Significant $conomic Probem.

16=. 3ni-e In Competition5 )he !onopoist Is Dri,en B" A Desire )o !a%imieProfit.

169. An" Firm5 Whether !onopoistic #r Competiti,e5 !ust Produce Where!argina Cost $uas !argina +e,enue In #rder )o !a%imie Profit.

116. )he !onopoiation #f A Pre,ious" Competiti,e Industr" Wi Lead )o+estricted Production And /igher Prices.

111. Without Barriers )o $ntr"5 A /igh8Profit !onopo" Is 3ni-e" )o Be Abe )o!aintain Its !onopo" Status.

11(. !onopo" Firms )"pica" /a,e Lower Costs )han Competiti,e Firms Because)he" +ecei,e Bu-8Bu"ing Discounts For )heir Inputs.

8/20/2019 ECO 405 Week 7 Quiz


11. In Addition )o +educing Production And +aising Prices5 !onopo" DecreasesProduct ;uait".

112. !onopoies Wi /a,e /igher Production Costs )han Competiti,e Firms.

114. !onopo" Can Lead )o A Per,erse +edistribution #f Income If )he #wners #f)he !onopo" Are Weathier )han Bu"ers.

11<. Se,ere Competition In A !ar-et Leads )o A Dead Weight Wefare Loss )oSociet".

11>. $%treme" Large Firms Cause Dead Weight Loss )o Increase.

11=. !onopoies In )he 3.S. $conom" Are $stimated )o +educe 7dp B" About 1:Per ear.

119. With ?atura !onopoies5 Consumers !a" Be Better #ff With A !onopo"

)han Competition.

1(6. !ar-et Faiure5 B" Itsef5 Is $nough )o Gustif" 7o,ernment +eguation #fBusiness.

8/20/2019 ECO 405 Week 7 Quiz


1(1. 7o,ernment +eguation Is Appropriate When )here Is !ar-et Faiure And+eguation Is Cost8$ffecti,e.

1((. Consumers +are" /a,e Compete Information About Products And )his Lac-#f Information Doesn*t eep )he !ar-et From !a%imiing Wefare.

1(. )he Capture )heor" Suggests )hat +eguators !a" $nd 3p Wor-ing For )heInterests #f )he Firms Being +eguated +ather )han )he Consuming Pubic.

1(2. Barriers )o $ntr" Are #ften Created B" 7o,ernments.

1(4. A Benefit #f !onopo" Is )hat Costs Are Lower.

1(<. )he Capture )heor" #f +eguation Suggests )hat 7o,ernment +eguation #fBusiness +epresents An 3nfair Attac- #n Pri,ate Firms B" 7o,ernment.

1(>. ?atura !onopoies Are Common In )he !odern Word $conom".

1(=. In )heir Desire )o Achie,e )he ;uiet Life5 !onopoists )end )o Aow Costs )o+ise Abo,e Competiti,e Le,es.

8/20/2019 ECO 405 Week 7 Quiz


1(9. When A Firm*s A,erage Costs Fa As #utput Is Increased5 )he Firm Is$%periencing $conomies #f Scae.

16. When )he @aue #f A Product )o A Consumer Is $nhanced When #thers AsoConsume )he 7ood5 $conomies #f Scae $%ist.

Cha%ter 0/

he Econo,ics O1 Pro1essional S%orts& What s he eal Score2

$ulti%le Choice Questions

1. Professiona Sports Cubs Differ From !ost #ther Business Firms In )heirA. #rganiationa Structure And +eationship With $mpo"eesB. Location And $mphasis #n )he Competiti,e SpiritC. #wnership And Profitabiit"D. Lega Status As Corporations And Limited )a% Liabiit"$. Abiit" )o #perate In Both )he Product And +esource !ar-et

(. In A Product !ar-et5A. Producers Se 7oods And Ser,icesB. Consumers Bu" 7oods And Ser,icesC. Fina 7oods And Ser,ices Are $%changedD. A #f )he Abo,e$. ?one #f )he Abo,e

. In A +esource !ar-et5A. Bu"ers And Seers $%change 7oods And Ser,icesB. +esourcefu Bu"ers Find 7oods )hat Are #therwise 3na,aiabeC. Bu"ers And Seers $%change Factors #f ProductionD. Firm !anagers $%change Production )echniues And Ideas$. Wor-ers $%change )heir Labor For )he Firm*s #utput

8/20/2019 ECO 405 Week 7 Quiz


2. Firms )hat Coordinate )heir Actions )o !a%imie Goint Profits Are Said )o /a,eFormed A&?'A. !onopson"B. CarteC. Product !ar-et

D. #igopo"$. $conomic )reat"

8/20/2019 ECO 405 Week 7 Quiz


4. Which #f )he Foowing Sports Leagues Can Be Considered A Carte0A. )he ?ationa Footba League &?f'B. )he ?ationa /oc-e" League &?h'C. )he ?ationa Bas-etba Association &?ba'

D. &A' And &B'$. A #f )he Abo,e

<. Which #f )he Foowing Is ?ot ?ecessar" For A Successfu Carte0 !embers!ustA. Produce !ost #f )he Industr"*s #utputB. Produce A /omogeneous #utputC. Produce /eterogeneous #utputs

D. Be Abe )o Di,ide )he !ar-et$. /a,e A Wa" )o Pre,ent Cheating

>. Which #f )he Foowing Best Characteries A Carte Arrangement0A. #pen CompetitionB. Shared CompetitionC. !onopson"D. Shared !onopo"$. #igopo"

=. )o !a%imie Goint Profits5 A Carte Wi Set )he !ar-et Price And #utput Such)hatA. $ach Firm*s !argina +e,enue $uas Its !argina CostB. )he !ar-et*s !argina +e,enue $uas )he !ar-et*s !argina CostC. $ach Firm*s Demand Schedue Is $ua )o )he !ar-et !argina CostD. )he !ar-et*s !argina +e,enue Is $ua )o $ach Firm*s !argina Cost$. ?one #f )he Abo,e

9. In A Product !ar-et With A Carte5 Prices Wi Be MMMMM And #utput Wi Be MMMMM )han In A Competiti,e !ar-et.A. /igherN Lower B. LowerN /igher C. /igherN /igher D. LowerN Lower $. Both Price And ;uantit" Wi Be )he Same

8/20/2019 ECO 405 Week 7 Quiz


16. Which #f )he Foowing Statements Is 0A. Anti8)rust Laws !a-e !ost Cartes Iega In )he 3.SB. Formation #f A Carte $nsures )hat $ach Firm Wi $arn 7reater Profits )hanWithout A Carte

C. Cartes !a%imie Goint Profits ?ot Indi,idua Firm ProfitsD. Professiona Sports Leagues Insure )he Stabiit" #f )eams B" Cooperating)hrough Carte Arrangements$. Cartes Are Difficut )o !aintain When Cheating Is Possibe

11. A +esource !ar-et With #n" #ne Bu"er #f A Factor #f Production Is CaedA&?'A. Imperfect !onopo"

B. !onopo"C. Competiti,e !ar-etD. !onopson"$. Carte

1(. A !onopson" Is A !ar-et With #n" #neA. Bu"er B. $mpo"er C. Product

D. A #f )he Abo,e$. A' And B'

1. )he Additiona Cost Incurred As A +esut #f /iring An Additiona Wor-er Is )heFirm*sA. )ota Cost #f Labor B. !argina Cost #f Labor C. A,erage Cost #f Labor

D. Labor Cost$. /uman Capita Cost #f Labor

12. Which #f )he Foowing Conditions Can 7i,e +ise )o A !onopson" $mpo"er0A. !obie Wor-ers With Limited S-isB. Lega Protection From Anti8)rust Laws And A !obie Wor-forceC. Immobie Wor-ers With /igh" Speciaied S-isD. A Carte Agreement )hat +esuts In +aising Goint Profits$. A !erger Between )wo 3nreated Firms

8/20/2019 ECO 405 Week 7 Quiz


14. Wh" Does A !onopson"*s !argina Cost #f Labor &!c' Cur,e Lie Abo,e )he!ar-et Supp" #f Labor Cur,e0 Because )he !onopson"A. !ust +aise )he Wage It Pa"s A $mpo"ees In #rder )o Attract And /ireAdditiona Wor-ers

B. !ust Pa" /igher Wages )o #n" )he Last Wor-ers /ired In #rder )o Attract And/ire Additiona Wor-ersC. Faces )he !ar-et Demand And !argina +e,enue Cur,esD. !ust Lower )he Wage It Pa"s A $mpo"ees In #rder )o !aintain Profitabiit"$. /as Such /igh Labor Costs +eati,e )o )he Supp" #f Labor

1<. If A Firm*s Wor-ers Add E15666 )o )he Firm*s +eceipts And )ota Wages $uaE4665 )hen !onopsonistic Profit $uas

A. E466B. E15666C. E15466D. E4665666$. A ?umber 3nabe )o Be Determined With )he Information 7i,en

1>. 3nder Which #f )he Foowing Conditions Wi A !onopson" /ire AnAdditiona Wor-er0 WhenA. !c O !rp

B. !c !rpC. !rp Q DD. !c Q !r $. D O S

1=. )o !a%imie Profit5 A !onopson" Wi /ire Wor-ers 3p )o )he Point WhereA. !c Q !r B. D Q S

C. !c Q !rpD. !c Q P$. !r Q P

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19. A !onopson" Wi /ire MMMMMM Wor-ers At A MMMMM Wage )han An $mpo"er InA Competiti,e Labor !ar-et.A. !oreN Lower B. !oreN /igher

C. FewerN /igher D. FewerN Lower $. )he Same ?umber #fN /igher

(6. )he Difference Between A Wor-er*s Contribution )o )he Firm*s +eceipts And )heWage IsA. !onopson" ProfitB. !onopo" Profit

C. Carte ProfitD. $conomic Profit$. !argina +e,enue Profit

(1. Which #f )he Foowing +eeases Professiona Athetes From Some #f )he!onopson" Powers #f )he Sports Leagues0A. Pa"er DraftsB. Long8)erm ContractsC. Free Agenc"

D. $%panded Pa"ing Seasons$. !inimum Wage Laws

((. Wh" Does )he A,erage Professiona Baseba Pa"er $arn !ore )han )heA,erage Doctor0A. )he Baseba Pa"er /as A Lower !cB. )he Doctor /as A /igher !rpC. )he Baseba Pa"er /as A /igher !rp

D. )here Are !ore Professiona Baseba Pa"ers )han Doctors$. )he Demand For Baseba Is /igher )han )he Demand For !edica Care

8/20/2019 ECO 405 Week 7 Quiz


;uestions ( 8 (> +efer )o )he 7raph Beow.

(. )his 7raph +epresents )he Labor !ar-et For A&?'A. !onopoistB. Competiti,e FirmC. Product !ar-et CarteD. !onopsonist$. #igopo"

(2. What Wage Wi !a%imie )his Firm*s $conomic Profit0A. W1

B. W(

C. W

D. W2

$. A Wage Abo,e W2

(4. /ow !an" Wor-ers Wi )his Firm /ire0

A. 6B. L1

C. L(

D. L

$. !ore )han L

8/20/2019 ECO 405 Week 7 Quiz


(<. If )his Labor !ar-et Is Competiti,e5 /ow !an" Wor-ers Wi Be /ired0A. 6B. L1

C. L(

D. L

$. !ore )han L

(>. If )his Labor !ar-et Is Competiti,e5 What Wage Wi Wor-ers Be Paid0A. W1

B. W(

C. W

D. W2

$. A Wage Abo,e W2

;uestions (= 8 ( +efer )o )he 7raph Beow.

8/20/2019 ECO 405 Week 7 Quiz


(=. )his 7raph +epresents )he Labor !ar-et For A&?'A. !onopoistB. Competiti,e FirmC. Product !ar-et Carte

D. !onopsonist$. #igopo"

(9. What Wage Wi !a%imie )his Firm*s $conomic Profit0A. E466B. E=66C. E15666D. Less )han E15666 But 7reater )han E6

$. E6

6. /ow !an" Wor-ers Wi )his Firm /ire0A. 6B. 16C. 1(D. 14$. !ore )han 14

1. If )his Labor !ar-et Is Competiti,e5 /ow !an" Wor-ers Wi Be /ired0A. 6B. 16C. 1(D. 14$. !ore )han 14

(. If )his Labor !ar-et Is Competiti,e5 What Wage Wi Wor-ers Be Paid0A. E6B. E466C. E=66D. E15666$. !ore )han E15666

8/20/2019 ECO 405 Week 7 Quiz


. A Labor 3nionA. Bargains #n Behaf #f A Wor-ersB. Conducts Loc-8#uts As A Bargaining )ooC. Is Concerned With Saaries +ather )han Wor- Conditions

D. Does A #f )he Abo,e$. Does ?one #f )he Abo,e

2. Which #f )he Foowing Is A Wor- Stoppage Initiated B" Wor-ers0A. Loc-outB. Stri-eC. !ediationD. Arbitration

$. !onopson"

4. Which #f )he Foowing Is A Wor- Stoppage Initiated B" !anagement0A. Loc-outB. Stri-eC. !ediationD. Arbitration$. !onopson"

<. #ne Wa" In Which Professiona Sports Leagues $nforce )he !onopsonistic$mpo"ment #f Pa"ers Is )hroughA. Free Agenc"B. #pen ArbitrationC. League $%pansionD. Saar" Caps$. A )aent Agenc"

>. )he +eati,e" /igh Saaries Paid )o Professiona Athetes +efectA. )heir Contribution )o )eam +e,enueB. )he $%poitation #f FansC. )heir Contribution )o Societ"*s 7enera We8BeingD. )he Success #f Labor 3nion +epresentation$. )he Socia @aue #f Professiona Sports

8/20/2019 ECO 405 Week 7 Quiz


=. )he A,erage Baseba Pa"er $arns A Saar" 7reater )han )he A,erage CoegeProfessor BecauseA. Baseba Pa"ers Contribute !ore )o Societ"*s 7enera We8BeingB. Coege Professors Contribute Less )o )heir $mpo"er*s +e,enues )han Baseba

Pa"ersC. Coeges Are Better Abe )o $nforce )heir !onopsonistic !ar-et PositionsD. )he !ar-et For Baseba Pa"ers Is !ore Competiti,e$. Coeges Are #wned B" )he State

9. If A Wor-er Adds (6 3nits )o A Firm*s )ota #utput5 )he #utput Is Sod For E(Per 3nit5 And )he Wor-er Is Paid E1665 )hen )he Wor-er*s !argina +e,enueProduct Is

A. (6B. 26C. <6D. 166$. (66

26. Which #f )he Foowing Statements Is ?ot 0A. $,en )hough )he $ssence #f Sports Is Competition5 Professiona Sports CubsCooperate With $ach #ther In )he !ar-etpace

B. Professiona Sports Leagues Are $conomic CartesC. From An $conomic Perspecti,e5 )he ?f5 ?h5 ?ba And !b Are Competiti,e!ar-etsD. Professiona Sports Leagues /a,e !onopson" Power In )he +esource !ar-et$. #wners #f Professiona Sports Cubs Attempt )o !a%imie )heir Goint Profits B"Goining Leagues

21. Professiona Baseba $no"s An $%emption From MMMMMMMM Laws )hat !a-e

Cartes Iega In !ost #ther Industries.A. !inimum WageB. AntitrustC. CommonD. Labor $. Anti8Competition

8/20/2019 ECO 405 Week 7 Quiz


2(. A Carte Is !ore Li-e" )o Be Successfu IfA. Carte !embers Produce !ost #f )he #utput In )he !ar-etB. !ar-et #utput Is /eterogeneousC. !embers #,erap In )heir Contro #f !ar-et )erritories

D. A #f )he Abo,e$. ?one #f )he Abo,e

2. Which #f )he Foowing Factors Is ?ot ?ecessar" )o Form A Successfu Carte0A. !embers !ust Be +esponsibe For !ost #f )he Industr"*s #utputB. !ember Firms Shoud Produce /omogeneous #utputC. !embers !ust Be Located In Cose Pro%imit" )o $ach #ther D. )he Carte !ust Be Abe )o Di,ide )he !ar-etpace Between !ember Firms

$. )here !ust Be A !echanism )o Pre,ent Cheating B" !ember Firms

22. )oda"5 )he Primar" Source #f +e,enue For !ost !aor League Cubs IsA. )ic-et SaesB. Concession SaesC. !erchandisingD. Broadcast +ights$. Par-ing

24. )o !a%imie Goint Profits5 A Carte Wi Produce #utput 3p )o )he Point WhereA. !r Q !cB. )r Q )cC. !r Q )cD. )r Q !c$. P Q !r

8/20/2019 ECO 405 Week 7 Quiz


2<. When A Professiona Sports League Ses Broadcast +ights For )he $ntireLeague5A. )he Seing Price Wi Be /igher )han )he Price )hat Woud Be Charged If $ach)eam Indi,idua" Sod Broadcast +ights

B. Fewer 7ames Wi Be Broadcast )han Woud Be If $ach )eam Indi,idua" SodBroadcast +ightsC. Goint Profits Among A )eams In )he League Can Be !a%imiedD. &A' And &B'$. A #f )he Abo,e

2>. For A Carte5 )heA. Demand Cur,e Is Aso )he !argina +e,enue Cur,e

B. !argina +e,enue Cur,e Lies Abo,e )he Demand Cur,eC. !argina +e,enue Cur,e Lies Beow )he Demand Cur,eD. !argina Cost Cur,e Lies Beow )he Demand Cur,e At A Points$. Supp" Cur,e Lies Abo,e )he Demand Cur,e At A Points

2=. A !onopson" $%ists Whene,er )hereA. Are !an" Bu"ers In A !ar-etB. Is #n" #ne Bu"er In A !ar-etC. Is #n" #ne Seer In A !ar-et

D. Are !an" Seers In A !ar-et$. Are ?o Barriers )o $nter #r Lea,e A !ar-et

29. In )he +esource !ar-et5 Professiona Sports Cubs !ust Face )heA. 3pward Soping !ar-et Supp" #f Labor Cur,eB. Downward Soping !ar-et Supp" #f Labor Cur,eC. /orionta !argina Cost #f Labor Cur,eD. Industr"8Le,e Demand For Labor Cur,e

$. 3pward Soping !argina +e,enue Product #f Labor Cur,e

8/20/2019 ECO 405 Week 7 Quiz


46. A Profit !a%imiing Sports Cub Wi /ire Pa"ers 3p )o )he Point Where )heA. Demand #f Labor $uas !argina +e,enue Product #f Labor B. Supp" #f Labor $uas )he !argina Cost #f Labor C. !argina +e,enue Product #f Labor $uas )he !argina Cost #f Labor

D. !argina Cost #f Labor $uas )he Wage +ate$. Wage $uas )he ;uantit" #f Labor A,aiabe

41. In A !onopson"5 )he Difference Between )he !argina +e,enue Product #fLabor And )he Wage +ate Is nown AsA. Goint ProfitB. !onopsonistic ProfitC. !onopsonistic Cost

D. Carte Profit$. Competiti,e +eturns

4(. )he Additiona +e,enue )hat A Pa"er 7enerates For /is $mpo"ing )eam IsCaedA. )ota Pa"er +e,enueB. !argina +e,enue ProductC. !argina ProductD. !argina +e,enue

$. !onopsonistic +e,enue Product

4. #,er )he Past )went" ears5 Free Agenc" In Professiona Sports /asA. Increased )he !onopsonistic Power #f Leagues And Caused Saaries )o StagnateB. +educed )he Bargaining Power #f Pa"ers And +aised #wner ProfitsC. +educed )he !onopsonistic Power #f Leagues And Caused Saaries )o +iseD. Impro,ed )he $conomic Position #f #wners B" Increasing )he Competition For7ood Pa"ers

$. /ad Litte $ffect #n )he Sports Industr"

8/20/2019 ECO 405 Week 7 Quiz


42. Which #f )he Foowing Statements Is 0A. From An $conomic Perspecti,e5 !ost Professiona Athetes Do ?ot $arn )heirPa"B. Saaries In An" Industr" +efect Labor*s Contribution )o )he #,era /eath And

We8Being #f Societ"C. Professiona Sports Cubs #perate In /igh" Competiti,e Product And +esource!ar-etsD. )he Carte Beha,ior #f Professiona Sports Leagues eeps )ic-et Prices Low$. )he Saar" #f A Professiona Athete +efects /is Contribution )o /is $mpo"ingCub*s +e,enue

44. From An $conomic Perspecti,e5 Which #f )he Foowing Is )he Best +eason For

A Cit" )o Attract A Professiona Sports )eam0A. A Professiona Sports )eam 7enerates Pubicit" And Creates Pubic +eations#pportunities For Businesses Located In )he Cit"B. A Professiona Sports )eam 7enerates A Significant ?umber #f ?ew Gobs For )heCommunit"C. Professiona Sports )eams Pa" Large Sums #f !one" In Cit" )a%esD. A ?ew )eam Wi Increase )he Demand For #ther $ntertainment +eatedActi,ities Within )he Loca Communit"$. Sports $nhance )he )a% Base #f Large Cities B" 7enerating Significant ?umbers#f ?ew Professiona Gobs

4<. Which #f )he Foowing Statements Is 0A. $,en )hough Professiona Athetes !a" $arn !iions #f Doars $ach ear5 It IsPossibe For )hem )o Be $%poited B" )heir $mpo"ersB. From An $conomic Perspecti,e5 Professiona Athetes Do ?ot $arn )heir Pa"C. )he $conomic Impact #f A Professiona Sports )eam #n )heir /ome Communit"Is +eati,e" SmaD. Free Agenc" /as Caused )he Saaries #f Professiona Athetes )o +ise #,er )ime$. B" Limiting $%pansion5 Professiona Sports Leagues $nsure 7reater Profits For)he $%isting )eams

4>. A !onopson" Wi Continue )o /ire Wor-ers 3p )o )he Point Where )heA. !argina Cost #f Labor Is $ua )o )ota +e,enueB. )ota Cost #f Labor Is $ua )o )he !argina +e,enue Product #f Labor C. !argina Cost #f Labor Is $ua )o )he !argina +e,enue Product #f Labor D. !argina Profit #f Production $uas )he )ota Cost #f Production$. !argina +e,enue Product #f Labor Is !a%imied

8/20/2019 ECO 405 Week 7 Quiz


4=. Which #f )he Foowing Factors /eps Professiona Sports )eams )o $%ercise!onopson" Power #,er )he Pa"ers )hat )he" /ire0A. Pa"er DraftsB. $%cusi,e Contracts )hat Limit Free Agenc"

C. )he Speciaied S-is #f Pa"ersD. A #f )he Abo,e$. ?one #f )he Abo,e

49. Which #f )he Foowing Factors +educes )he !onopson" Power #f ProfessionaSports )eams In )he $mpo"ment #f Pa"ers0A. Pa"er DraftsB. )he +eser,e Cause

C. )he Long8)erm $mpo"ment ContractsD. Carte Agreements Between )eams$. Free Agenc"

<6. A Professiona Sports League Can !a%imie )he +e,enue It 7enerates FromSeing Broadcast +ights B" Pa"ing $nough 7ames Such )hatA. Demand $uas Supp"B. )ota +e,enue $uas )ota CostsC. !argina +e,enue $uas !argina Costs

D. !argina +e,enue $uas )ota Costs$. )ota +e,enue $uas !argina Costs

<1. If A Carte Disco,ers )hat Its !argina +e,enue Is 7reater )han Its !arginaCost #f Production5 )he Carte ShoudA. Increase ProductionB. Shut DownC. +educe Production

D. /ire Fewer Wor-ers$. Increase )he ?umber #f Carte !embers

8/20/2019 ECO 405 Week 7 Quiz


<(. If A Carte Disco,ers )hat Its !argina Cost Is 7reater )han !argina +e,enue5)he Carte ShoudA. Increase ProductionB. Shut Down

C. +educe ProductionD. /ire Fewer Wor-ers$. Increase )he ?umber #f Carte !embers

<. )eams )hat Beong )o Professiona Sports Leagues AreA. Carte !embersB. In Business )o !a-e A ProfitC. !onopson" $mpo"ers

D. A #f )he Abo,e$. ?one #f )he Abo,e

<2. Appro%imate" What Percent #f Funding For Stadium Construction And+eno,ation /as Come From Pubic Sources In +ecent ears0A. 1B. About 16C. Less )han (6D. #,er 46

$. ?ear" 166

<4. According )o $conomist Andrew imbaist5 )he Gac-son,ie Gaguars $%pansionFootba )eam /as An $conomic Impact #n )he Loca Area Comparabe )o AA. ?ew Department StoreB. !aor /urricaneC. Large !iitar" InstaationD. State 3ni,ersit"

$. Cit" Par-

8/20/2019 ECO 405 Week 7 Quiz


<<. )he Primar" Benefits #f A Professiona Sports )eam AreA. !assi,e $conomic De,eopmentB. Pri,ate" FundedC. Saaries And Wages

D. Intangibe$. A #f )he Abo,e

<>. When Professiona Sports Leagues See- )o Achie,e Parit"5 )he" Are See-ingA. Fair WagesB. Competiti,e BaanceC. )eams With An Athetic Ad,antageD. $ua !argina +e,enue Product Across )eams

$. /omogeneous @iews #n League Poicies

<=. Which #f )he Foowing Contributes )o !onopson" Power In ProfessionaSports0A. Pa"er !obiit"B. Free Agenc"C. Pa"er DraftsD. A #f )he Abo,e$. ?one #f )he Abo,e

<9. Which #f )he Foowing Is )he Best $conomic +eason For )a%pa"ers )o Support)he De,eopment #f Faciities For Professiona Sports )eams0A. )he Intangibe Spio,er Benefits #f )he )eam5 Such As Ci,ic PrideB. )he ?umber #f Gobs )hat Wi Be Created B" )he )eamC. )he $conomic Impact #n )he Cit" Due )o )ic-et SaesD. )he ?ew )a%es )hat Wi Be Paid B" )he Pa"ers And Coaches$. )he )ourists )hat Wi @isit )own Whie Attending /ome 7ames

>6. When Does A Firm $%perience !onopson" Profits0A. #n" When )he !argina Cost #f Labor Is 7reater )han )he !argina +e,enueProduct #f Labor B. When )he )ota +e,enue $%ceeds )he !argina Cost #f ProductionC. #n" When )he !argina +e,enue Product #f Labor $%ceeds )he !argina Cost#f Labor D. #n" When )he Firm Is A !ember #f A Carte$. When )he Firm Is A !onopo" In Its Product !ar-et

8/20/2019 ECO 405 Week 7 Quiz


rue ' 3alse Questions

>1. Professiona Sports Cubs Are Businesses #perated For Profit.

>(. Professiona Sports Leagues5 Li-e )he ?f5 Were Formed B" )eams In An $ffort)o $arn 7reater Profits And )o $nsure Sur,i,a.

>. A Professiona Sports Cubs !ust #perate Independent" )o 7uarantee ACompetiti,e $conomic $n,ironment.

>2. 3ni-e #ther Wor-ers5 It Is Difficut )o !easure )he Producti,it" #f AProfessiona Athete.

>4. When A Pa"er Is Drafted B" A )eam5 )hat )eam Acuires )he HPropert" +ightsH)o )he Pa"er*s $mpo"ment Contract.

><. In Footba5 ?ew Pa"ers Can Se )heir Ser,ices )o )he /ighest Bidding ?f)eam.

>>. )ic-ets And Broadcast +ights )o Baseba 7ames Are Bought And Sod In )heProduct !ar-et.

8/20/2019 ECO 405 Week 7 Quiz


>=. A Carte $%ists When Firms Coordinate )heir Actions In A !anner )o !a%imieGoint Profits.

8/20/2019 ECO 405 Week 7 Quiz


>9. Antitrust Laws !a-e !ost Cartes Lega Forms #f Business In )he 3nitedStates.

=6. )he ?ationa Bas-etba Association Is A Carte.

=1. A Carte Is A HShared !onopo".H

=(. Prices And #utput Are 7reater With A Carte )han 3nder Competition.

=. Profits Are !ore $ua" Distributed In A Competiti,e Industr" )han In AnIndustr" Dominated B" A Carte.

=2. Professiona Sports Leagues Do ?ot +eguate )he $mpo"ment #f Pa"ers B"!ember )eams.

=4. A !onopson" Is A Singe Bu"er In A +esource !ar-et.

=<. )he Immobiit" #f Pa"ers Between )eams And )he Athetes* /igh" SpeciaiedS-is 7enerate !onopson" Power For Professiona Sports Cubs.

8/20/2019 ECO 405 Week 7 Quiz


=>. )he !argina Cost #f Labor Cur,e &!c' +epresents )he Change In A Firm*s)ota Labor Cost Due )o Seing An Additiona 3nit #f #utput.

==. If A Pa"er*s !rpO !c5 )he Pa"er Shoud Be /ired B" )he )eam.

=9. )he !c Cur,e Lies Abo,e )he Supp" #f Labor Cur,e And Is !ore Steep"Soped.

96. A !onopson" !ust Face )he !ar-et Supp" #f Labor Schedue Because It Is)he #n" $mpo"er In )he !ar-et.

91. A Firm Can !a%imie Its $conomic Position B" /iring Wor-ers 3p )o )he Point

Where !c Q !rp.

9(. A !onopo" !ust Face )he !ar-et Supp" #f Labor Schedue Because It Is )he#n" $mpo"er In )he !ar-et.

9. !onopson" Profit Is )he Difference Between A Wor-er*s !rp And )he !c.

92. $conomic Ana"sis Suggests )hat A Free Agent Baseba Pa"er Wi $arn Less)han An $ua" )aented Pa"er Who Is ?ot A Free Agent.

8/20/2019 ECO 405 Week 7 Quiz


94. Professiona Athetes Do ?ot $arn )heir Pa" From An $conomic Perspecti,e.

9<. A Stri-e Is A Wor- Stoppage Initiated B" !anagement.

9>. A Labor 3nion Bargains #n Behaf #f Wor-ers For Better Wages And Wor-ingConditions.

9=. Saar" Caps $nforce !onopsonistic $mpo"ment #f Pa"ers Across )eams In AProfessiona Sports League.

99. A +ecent" Drafted Pa"er Wi !ost Li-e" Command A /igher Saar" )han AFree Agent.

166. Labor Disputes Are +are In Professiona Sports And Are Li-e" )o Become$,en Less Common.

161. !ost $conomists Argue )hat Professiona Sports )eams Shoud Be 3sed As An$conomic De,eopment )oo For Loca Communities.

16(. )he Pubic +eations Benefit #f A Cit"*s Professiona Sports )eam Is 7enera"!ore @auabe )han )he ?umber #f Gobs It Creates.

8/20/2019 ECO 405 Week 7 Quiz


16. )he $conomic Impact #f A ?ew Professiona Sports )eam #n A Cit" Is About)he Same As A ?ew Department Store.

162. !ost ?ew Stadiums And Arenas For Professiona Sports )eams Are Pri,ate"Buit5 Without Support From Loca )a%pa"ers.

164. Professiona Sports )eams )end )o +eocate When )here Is A Surpus #f )eamsIn )heir League.

16<. )he Shortage #f )eams In Professiona Sports Is )he Primar" +eason )hat)eams +eocate.

16>. $conomic Factors Cannot $%pain Wh" )eams +eocate Between Cities.

16=. As It Becomes $asier For Professiona Footba Pa"ers )o Become Free Agents5 ?f Saaries Are Li-e" )o Increase #,er )ime.

169. )he $conomic Factors )hat Cause Professiona Sports Leagues )o $%pand AsoCause Some $%isting )eams )o +eocate.

116. )he HCi,ic PrideH $no"ed B" A !aor League Cit" /as ?o $conomic @aue.

8/20/2019 ECO 405 Week 7 Quiz


111. Free Agenc" Increases )he !onopson" Power )hat Professiona Sports )eams$%ert #,er )he Pa"ers )hat )he" /ire.

11(. If A Carte*s !argina +e,enue Is 7reater )han Its !argina Cost5 It ShoudProduce !ore.

11. B" Beonging )o A Carte5 A Firm Can 7uarantee )hat Its Indi,idua Profit WiBe 7reater )han If It $ngaged In Competition.

112. )he +eser,e Cause /eped )o +aise )he Saaries #f Professiona BasebaPa"ers.

114. For A Carte5 Goint Profit Is !a%imied Where !argina +e,enue $uas!argina Costs.

11<. Professiona Sports Leagues Are Both Cartes And !onopsonies.

11>. Coege Athetes Who $nter )he !aor Leagues Are Awa"s /ired B" )he )eam)hat Is Wiing )o Pa" )he /ighest Saar".

11=. A Wor- Stoppage Initiated B" !anagement Is Caed A Loc-8#ut.

8/20/2019 ECO 405 Week 7 Quiz


119. B" Adding ?ew )eams5 Professiona Sports Leagues 7uarantee )hat $%isting!ember )eams $arn 7reater Profits.

1(6. From An $conomic Perspecti,e5 A Professiona Athetes Are #,erpaid.

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ECO 405 Week 7 Quiz