Antitrust legislation is an attempt by government to make competition equal. efficient. structured. fair. Question 2 An early piece of anti-trust legislation is the Sherman Act. Mann Act. DIDMCA of...

Melissa Buehrlen
Instructor Somers
Business Economics
06/17/2013
Final Exam
Question 1
Antitrust legislation is an attempt by government to make competition

equal.

efficient.

structured.

fair.
Question 2
An early piece of anti-trust legislation is the

Sherman Act.

Mann Act.

DIDMCA of 1980.

Federal Reserve Act of 1913.
Question 3
The Herfindahl-Hirschman Index is used to measure


and recognition.

the ease of market entry.

market power.

none of these choices.
Question 4
A tax on an imported product is called a

tariff.

quota.

dumping signal.

all of these choices.
Question 5
According to economic theory, profits are maximized at the rate of output where

price equals total revenue.

marginal revenue equals marginal cost.

economic profits are zero.

price and marginal revenue are equal.
Question 6
Executives should

spend an additional dollar on an activity if consumers value it by more than a dollar.

do more of something if marginal revenue is positive.

pend an additional dollar on an activity if consumers value it by less than a dollar.

do more of something if average revenue is greater than zero.
Question 7
Entry of new firms causes

accounting profits to go to zero.

market share to grown.

economic profits to go to zero.

total revenue to be maximized.
Question 8
If a firm has market power it may be able

to protect market share.

to continue to earn economic profits.

minimize marginal costs.

to maximize total revenue.
Question 9
Government may make it possible

to create a network externality.

to find 'winners' in the stock market.

for a firm to become a monopoly.

all of these choices.
Question 10
If a firm's product becomes a commodity

the firm gains market power.

the firm's strategy has apparently paid off.

the firm has become a monopoly.

the firm looses market power.
Question 11
Brand names help

create commodities.

maintain market power.

create competition.

keep economic profits at zero.
Question 12
If firms are exiting a market then

economic profits must be zero

economic profits must be greater than zero

economic profits must be less than zero

both economic and accounting profits must be greater than zero.
Question 13
Fixed costs

do not vary with
output

vary with output

do not vary with
price

vary with price
Question 14
Variable costs

do not vary with price.

do not vary with output.

vary with price.

vary with output.
Question 15
The key to understanding the movement in stock prices is to understand

expectations.

market share.

accounting profits.

the firms contribution to the social welfare of its employees.
Question 16
Companies spend ____ on pricing decisions.

too much time

the right amount of time

too little time

too much money
Not sure of answer, the answer is company specific
Question 17
Knowing demand is equivalent to knowing the

employee.

customer.

average investor.

economic profit.
Question 18
In general, elasticities measure

the change in quantity demanded when a product attribute changes.

the change in consumer spending when income changes.

the change in an attribute for a percentage change in price.

the percentage change in the quantity demanded resulting...