ECO 405 Week 7 Quiz – Strayer

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Quiz 6 Chapter 8 and 9

The Economics Of Monopoly Power: Can Markets Be Controlled?

Multiple Choice Questions
 

1. Imperfect Competition Can Best Be Described As A Situation In Which
A. A Few Large Firms Produce And Sell A Particular Product
B. Many Firms Produce And Sell A Product
C. Only One Firm Produces And Sells A Product
D. Firms Exercise Some Monopoly Power
E. Both (A) And (D)

2. The Monopoly Power Of A Firm Can Be Measured By The Firm's
A. Profits Relative To Other Firms In The Industry
B. Control Over The Demand For Its Product
C. Revenues As A Percent Of Industry Revenues
D. Prices Compared To Average Prices In The Industry
E. Control Over The Market Supply Of Its Product

3. Which Of The Following Is Likely To Have The Most Monopoly Power?
A. Ford Motor Corporation
B. Your Local Water Company
C. Mobil Oil Corporation
D. Avon Products (Cosmetics)
E. A Fast Food Restaurant

4. Concentration Ratios Are Used To Measure The
A. Potential Monopoly Power Within An Industry
B. Strength Of The Demand For An Industry's Product
C. Potential Monopoly Power Of A Firm
D. Degree Of Competition Between Firms In Different Markets
E. Level Of Perfection In A Competitive Market

5. Suppose The U.S. Auto Industry Sells 1,000 Autos Per Year. Of This, Gm Sells 400, Ford 300, And Dodge 250. Given This Information, The Four-Firm Concentration Ratio Of The Industry Must Be At Least
A. 95%
B. 5%
C. 50%
D. 100%
E. Cannot Tell Without Further Information

 Questions 06 - 08 Refer To The Table Below.
  

6. The 4-Firm Concentration Ratio In This Industry Is
A. 0.5
B. 0.6
C. 0.7
D. 0.8
E. 0.9

7. The 6-Firm Concentration Ratio In This Industry Is
A. 0.6
B. 0.7
C. 0.8
D. 0.9
E. 1.0

8. Assume That No Firm In This Industry Accounts For Less Than 5% Of Industry Sales. What Is The Largest Number Of Firms That Could Be In This Industry?
A. 6
B. 7
C. 8
D. 9
E. 10