Econ 202 Final Exam Practice

24 Questions  I  By Homegurl081990
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Practice Test for final exam.

  
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  • 1. 
    A market situation in which there are a few large firms is called
    • A. 

      Monopolistic competition

    • B. 

      Monopoly

    • C. 

      Oligopoly

    • D. 

      Imperfect competition


  • 2. 
    In an oligopolistic market, each firm
    • A. 

      Faces a perfectly elastic demand function

    • B. 

      Produces at minimum average cost in the long run

    • C. 

      Has a constant marginal cost

    • D. 

      Must consider the reaction of rival firms when making a pricing or ouptput decision


  • 3. 
    An oligopoly is a market situation in which
    • A. 

      All the sellers act independently of others

    • B. 

      There is a single firm producing several varieties of a product

    • C. 

      There are very few sellers and they recognize their strategic dependence on one another

    • D. 

      There are many firms producing differentiated products


  • 4. 
    The most common reason for the existence of oligopolies is
    • A. 

      Diseconomies of scale

    • B. 

      Economies of scale

    • C. 

      Ease of entry

    • D. 

      Advertising


  • 5. 
    Monopolies and oligopolies both erect barriers to entry through the use of
    • A. 

      Advertising

    • B. 

      Price cutting

    • C. 

      Franchising

    • D. 

      Patents


  • 6. 
    Suppose an industry has total sales of $25 million per year.  The two largest firms have sales of $6 million each, the third largest firm has sales of $2million, and the fourth largest firm has sales of $1 million.  The four-firm concentration ratio for this industry is
    • A. 

      36 percent

    • B. 

      60 percent

    • C. 

      25 percent

    • D. 

      50 percent


  • 7. 
    Within a game theory model, if a change in decision-making raises corporation A's profits by $50 and lowers corporation B's profits by $50, the game is a
    • A. 

      Positive-sum game

    • B. 

      Zero-sum game

    • C. 

      Cooperative game

    • D. 

      Negative-sum game


  • 8. 
    The two basic types of government regulation are
    • A. 

      Economic regulation and industry regulation

    • B. 

      Regulation of natural monopolies and regulation of cartels

    • C. 

      Social regulation and labor law

    • D. 

      Social regulation and economic regulation


  • 9. 
    Which type of regulation applies to all firms in the economy, as opposed to only covering specific industries?
    • A. 

      Social regulation

    • B. 

      Economic regulation

    • C. 

      Statutory regulation

    • D. 

      Rate regulation


  • 10. 
    Which type of regulation applies to all firms in the economy, as opposed to only covering specific industries?
    • A. 

      Statutory regulation

    • B. 

      Rate regulation

    • C. 

      Economic regulation

    • D. 

      Social regulation


  • 11. 
    The first antitrust law in the United States was the
    • A. 

      Clayton Act

    • B. 

      Robinson-Patman Act

    • C. 

      FTC Act

    • D. 

      Sherman Act


  • 12. 
    The primary antitrust statute in the United States is the
    • A. 

      NLRA of 1935

    • B. 

      Sherman Antitrust Act of 1890

    • C. 

      SEC Act of 1933

    • D. 

      Federal Reserve Act of 1913


  • 13. 
    Which of the following would most likely promote competitive pricing of products?
    • A. 

      Clayton Act

    • B. 

      Wheeler-Lea Act

    • C. 

      Robinson-Patman Act

    • D. 

      Federal Trade Commission Act


  • 14. 
    The Federal Trade Commision regulates which of the following?
    • A. 

      Financial markets

    • B. 

      The banking industry

    • C. 

      Trade with third world countries

    • D. 

      Unfair trade practices by businesses


  • 15. 
    The Federal Trade Commission Act was designed to
    • A. 

      Prohibit bundling

    • B. 

      Limit company profits from foreign sales

    • C. 

      Prohibit cutthroat pricing

    • D. 

      Increase foreign trade


  • 16. 
    The regulatory agency most concerned with false advertising is the
    • A. 

      Federal Trade Commission

    • B. 

      Antitrust Division of the Justice Department

    • C. 

      National Labor Relations Board

    • D. 

      Federal Deposit Insurance Corp.


  • 17. 
    Which antitrust act was passed to protect independent retailers from "unfair discrimination" by chain stores?
    • A. 

      FTC Act

    • B. 

      Wheeler-Lea Act

    • C. 

      Robinson-Patman Act

    • D. 

      Sherman Act


  • 18. 
    All of the following are exempt from antitrust laws EXCEPT
    • A. 

      Oil companies

    • B. 

      Public utilities

    • C. 

      Professional baseball

    • D. 

      Labor unions


  • 19. 
    Which of the following is NOT exempt from antitrust laws?
    • A. 

      Public transit systems

    • B. 

      Professional baseball

    • C. 

      Airlines

    • D. 

      Labor unions


  • 20. 
    The act of selling an item in slightly altered forms at different prices and to different groups of consumers is known as
    • A. 

      Bundling

    • B. 

      Tie-in sales

    • C. 

      Versioning

    • D. 

      Lemons marketing


  • 21. 
    The primary measure of monopoly power is called the
    • A. 

      Litmus text

    • B. 

      Monopoly measure

    • C. 

      Robinson-Patman Act ratio

    • D. 

      Market share test


  • 22. 
    The Sudsy Soda Company will not sell its soft drinks to a restaurant unless that business also buys paper cups from Sudsy.  This requirement is an example of
    • A. 

      Price differentiation

    • B. 

      Complementary pricing

    • C. 

      Product versioning

    • D. 

      Tie-in sales


  • 23. 
    The market demand curve for labor
    • A. 

      Slopes upward

    • B. 

      Slopes downward

    • C. 

      Is horizontal at the going wage rate

    • D. 

      Is vertical at the existing supply of labor


  • 24. 
    An industry's equilibrium wage rate is extablished
    • A. 

      By the slope of the industry demand curve for labor alone

    • B. 

      By the industry supply curve for labor alone

    • C. 

      By the Labor Deparment and based on the cost of living in the area

    • D. 

      By the intersection of the industry supply and demand curves for labor


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