Question:

A monopolist is a:

A.

Price taker

B.

Price maker

C.

Policy maker

D.

All of these

Answer» b. Price maker

Question:

Total profits are maximized where

A.

TR equals TC

B.

the TR curve and the TC curve are parallel

C.

the TR curve and the TC curve are parallel and TC exceeds TR

D.

the TR curve and the TC curve are parallel and TR exceeds TC.

Answer» d. the TR curve and the TC curve are parallel and TR exceeds TC.

Question:

Under monopoly the slope of AR curve is:

A.

Upward sloping

B.

downward sloping

C.

horizontal

D.

None of these

Answer» b. downward sloping

Question:

The purely competitive firm’s supply curve:

A.

is perfectly inelastic in the short run.

B.

is horizontal in the long run.

C.

is upward sloping when some inputs are fix

Answer» c. is upward sloping when some inputs are fix

Question:

Which of the following is NOT a characteristic of monopolistic competition?

A.

there are many sellers

B.

there are many buyers

C.

everybody is perfectly informed

D.

the goods are identical

Answer» d. the goods are identical

Question:

An international price discrimination

A.

Dumping

B.

Bundling

C.

Discounting

D.

Off loading

Answer» a. Dumping

Question:

The best, or optimum, level of output for the pure monopolist occurs at the point where

A.

STC is minimum

B.

TR = STC

C.

TR is maximum

D.

the TR and STC curves are parallel.

Answer» d. the TR and STC curves are parallel.

Question:

In the case of monopolistic competition,

A.

Short run supply curve cannot be defined

B.

MR curve cannot be defined

C.

AR curve cannot be defined

D.

None of the above

Answer» a. Short run supply curve cannot be defined

Question:

If P exceeds AVC but is smaller than AC at the best level of output, the firm is

A.

making a profit

B.

incurring a loss but should continue to produce in the short run

C.

incurring a loss and should stop producing immediately

D.

breaking even.

Answer» b. incurring a loss but should continue to produce in the short run

Question:

Who develop the ISLM open economy model?

A.

Mundell

B.

Fleming

C.

Both

D.

None

Answer» c. Both