Chapter9 Monopolistic Competition经济学英语题库.docx

Chapter9 Monopolistic Competition经济学英语题库.docx

《Chapter9 Monopolistic Competition经济学英语题库.docx》由会员分享，可在线阅读，更多相关《Chapter9 Monopolistic Competition经济学英语题库.docx（15页珍藏版）》请在冰豆网上搜索。

Chapter9MonopolisticCompetition经济学英语题库

Chapter9MonopolisticCompetition

MultipleChoice

1.Becausemonopolisticallycompetitivefirmsproducedifferentiatedproducts,eachfirm（d）

a.facesademandcurvethatishorizontal.

b.facesademandcurvethatisvertical.

c.hasnocontroloverproductprice.

d.hassomecontroloverproductprice.

2.Whichofthefollowingconditionsdistinguishesmonopolisticcompetitionfromperfectcompetition?

（d）

a.Numberofsellers.

b.Freedomofentryandexit.

c.Smallsizefirms.

d.Differentiationofproduct.

3.Ifexistingfast-foodfirmsrealizesizableeconomicprofitsintheshortrun,thedemandcurvesofexistingfirmswill（a）

a.decreaseandbecomemoreelastic.

b.decreaseandbecomelesselastic.

c.increaseandbecomemoreelastic.

d.increaseandbecomelesselastic.

4.Whenamonopolisticallycompetitivefirmraisesitsprice,（b）

a.quantitydemandedfallstozero.

b.quantitydemandeddeclines,butnottozero.

c.themarketsupplycurveshiftsoutward.

d.quantitydemandedremainsconstant.

5.Thereareseveralreasonswhydemandcurvesmaybecomemoreelastic.Amongthemare（b）

a.themarketbecomesmoremonopolisticandcrosselasticitiesapproachzero.

b.thegoodsbecomelessdifferentiatedandmorefirmsentertheindustry.

c.consumershavefewersubstitutesandfirmsdropoutoftheindustry.

d.industrydemandincreasesandconsumersincreasespending.

6.Whichofthefollowingisacharacteristicofoligopolyormonopolisticcompetition,butnotperfectcompetition?

（a）

a.Advertisingandsalespromotion.

b.ProfitmaximizationaccordingtotheMR=MCrule.

c.Firmsbeingpricetakersratherthanpricemakers.

d.Horizontaldemandandmarginalrevenuecurves.

7.Productdifferentiationallowsthefirmto（b）

a.raisepriceandlowerquantitydemanded.

b.raisepricewithoutsufferingasubstantiallossofsales.

c.shiftthemarketdemandcurvetotheleft.

d.decreasebarrierstoentry.

8.Themaximumtotalshortruneconomicprofit,orminimumloss,forthemonopolisticallycompetitivefirminthisfigureis©

a.zero.

b.aprofitof$575.00.

c.aprofitof$2,000.00.

d.alossof$375.00.

9.Cecilia’sCaféisamonopolisticcompetitor.IfCecilia’siscurrentlyproducingattheoutputlevelwhereheraveragetotalcostisminimizedandthecaféisearningeconomicprofits,theninthelongrunoutputwill（a）

a.decreaseandaveragetotalcostwillincrease.

b.decreaseandaveragetotalcostwilldecrease.

c.remainunchangedasCecilia’sisdoingthebestitcan.

d.increaseandaveragetotalcostswilldecrease.

10.Inthelongrun,freedomofentryintoamarketforcesa（b）tochargeapriceequaltoaveragetotalcost,butaveragetotalcostexceedsitsminimumlevel

a.perfectlycompetitivefirm

b.monopolisticallycompetitivefirm

c.oligopolisticfirm

d.puremonopoly

11.Whichofthefollowingbestdescribestheideaofexcesscapacityinmonopolisticcompetition?

（b）

a.Firmsproducemoreoutputthanissociallydesirable.

b.Theoutputproducedbyatypicalfirmislessthanwhatwouldoccuratthe

minimumpointonitsATCcurve.

c.duetoproductdifferentiation,firmschooseoutputlevelswhereP>ATC.

d.firmskeepsomesurplusoutputonhandincasethereisashiftinthedemand

fortheirproduct.

12.Whichofthefollowingindividualsquotedbelowisleastlikelytoarguethatexcesscapacityinmonopolisticallycompetitiveindustriesisawasteofresources?

（b）

a.“Anautomobileistransportation,nothingelse.”

b.“Tomatoesornotomatoes.Thechoiceoftoppingsonaburgercanbe

importanttoaconsumerthesedayswhenindividualismisincreasinglyimportanttopeople.”

c.“Gasolineisgasolinenomatterwhatthebrandname.”

d.“ItaketheairlinethatwillgetmefromAtoBatthelowestprice.”

13.Thetraditionalviewofmonopolisticcompetitionholdsthatthistypeofindustrialstructureisinefficientbecause（b）

a.therearetoofewfirmstoreachanefficientlevelofproduction.

b.firmsdonotoperateattheoutputthatminimizesaveragecosts.

c.advertisingisnotusedextensivelyenoughtoyieldanefficientdifferentiation

oftheproducts.

d.consumersdonothaveenoughchoiceamongtheproductvarietiesavailable.

14.Monopolisticcompetitionisconsideredbysometobeinefficientbecause（a）

a.priceexceedsmarginalcost.

b.outputexceedscapacityoutput.

c.longrunprofitsarepositive.

d.ofalloftheabove.

15.Perhapsit’snotaproblematall,butif“toomuchchoice”isaproblemforconsumers,itwouldoccurinwhichmarketstructure（s）?

（c）

a.Perfectcompetition.

b.Monopoly.

c.Monopolisticcompetition.

d.Perfectcompetitionandmonopolisticcompetition.

16.Whichofthefollowingmightbeaneffectofadvertising?

（d）

a.Increasedproductdifferentiation.

b.Increasedtotalcostsofproduction.

c.Increaseddemandfortheproduct.

d.Alloftheabove.

17.Inthelongrunundermonopolisticcompetition,whenfirmsadvertise,（a）

a.theywillstillearnzeroeconomicprofit.

b.theycanearnpositiveeconomicprofitbyincreasingmarketshare.

c.themarketpricemustfall.

d.themarketpricemustrise.

18.Advertising（d）

a.providesinformationaboutproducts,includingpricesandsellerlocations.

b.hasbeenproventoincreasecompetitionandreducepricescomparedto

marketswithoutadvertising.

c.signalsqualitytoconsumers,sincefirmsspendsomuchmoneyonads.

d.doesalloftheabove.

29.Criticsofadvertisingarguethat（a）

a.advertisingwastesresourcesbecauseitcreatesanimagewithoutnecessarily

improvingproductquality.

b.advertisinglowersbarrierstoentryintoanindustrybecausenewfirmscanmoreeasilyestablishthemselvesascompetitors.

c.advertisingincreasescompetitionbyprovidinginformationaboutprices.

d.advertisingencouragesmonopolizationofmarketsbyraisingentrybarrierstoo

high.

30.Manyairlinespromise“frequentflyer”milestopassengerswhoflytheirairlinesregularly.Thisisanexampleofafirmattemptingtocreate（d）

a.pricediscrimination.

b.apredatorypricingscheme.

c.discountingbelowmarginalcosts.

d.brandloyalty.

31.OneofthereasonsthatKodakandFujifilmsadvertisesomuchisthat（c）

a.eachhopestocreateanaturalmonopoly.

b.theyareinaperfectlycompetitiveindustrywhereadvertisingisthedifference

betweeneconomicandnormalprofits.

c.theywanttodevelopbrandloyalty.

d.theywanttoincreasepriceelasticitiesofdemand.

32.IfsomecoffeedrinkerscontinuetobuyMaxwellHousecoffeeevenwhenFolger’scoffeeisonsaleandcheaper,itmaybearesultof（c）

a.irrationalconsumerbehavior.

b.ahighcrosselasticitybetweenthetwogoods.

c.brandloyalty.

d.MaxwellHousebeingamonopoly.

ShortAnswerAndEssay

1.Howdothecharacteristicsofperfectcompetitionandmonopolisticcompetitiondiffer?

Answer:

Inmonopolisticcompetition,theproductssoldaresimilarbutdifferentiated,therebyenablingfirmstocompeteonthebasisofproductdevelopmentandmarketingtofurtherdifferentiatetheirproducts.Inperfectcompetitiontheproductsareidentical,therebyeliminatingtheopportunityforfirmstocompetebydifferentiatingtheirproduct.

2.Whyiscollusionaboutthepriceandamountofoutputimpossibleinmonopolisticcompetition?

Answer:

Thesmallerthenumberoffirms,themorelikelycollusionistooccur.Monopolisticcompetitionhastoomanyfirmsforcollusiontobesuccessful.

3.Whatdodemandandmarginalrevenuecurveslooklikeinmonopolisticcompetition?

Howdotheycomparetothedemandandmarginalrevenuecurvesinperfectcompetitionandmonopoly?

Answer:

Inmonopolisticcompetition,theproductisdifferentiated.Thisfactgiveseachfirmsomecontroloverprice,soeachfirm’sdemandcurveisdownwardsloping.Becausetherearemanyclosesubstitutesforthesefirms’goods,demandiselastic.Thesefirmsmustlowertheirpricetosellmore;thereforethemarginalrevenuecurveisbeneaththedemandcurve.

Inperfectcompetition,theproductishomogeneous,whichmakesfirmsprice-takers,abletosellasmuchastheywishatthemarketprice.Therefore,marginalrevenueequalsprice,andthemarginalrevenuecurveandthedemandcurvearethesameandarehorizontal.

Inmonopoly,thereisonlyonefirm.Thefirmfacesthemarketdemand,whichissteep,becausetherearenoclosesubstitutesforthegood.Thefirmmustloweritspricetosellmore,soforasingle-pricemonopoly,themarginalrevenuecurveisbeneaththedemandcurve.

4.WhatistheHerfindahl-HirschmanIndexandwhatdoesitmeasure?

Answer:

TheHerfindahl-HirschmanIndex,orHHI,isanindexusedtomeasuretheextenttowhichamarketisdominatedbyasmallnumberoffirms.TheHHIequalsthesumofthesquaredpercentagemarketsharesofeachofthe50largestfirmsinthemarket.AmonopolywillhaveaHHIof10,000whereasperfectcompetitionwillhaveasmallHHI.

5.“Afirminmonopolisticcompetitionmaximizesitsprofitbyproducingwhereitspriceisequaltoitsmarginalcost.”Isthepreviousstatementcorrectorincorrect?

Answer:

Thestatementisincorrect.Afirminmonopolisticcompetitionmaximizesitsprofitbyproducingwhereitsmarginalrevenueequalsitsmarginalcost.Becausethemarginalrevenueislessthanthepriceforafirminmonopolisticcompetition,itdefinitelyisnotthecasethatthefirmproduceswhereitspriceequalsitsmarginalcost!

6.Howdoesafirminmonopolisticcompetitiondetermineitspriceandquantity?

Whattypeofprofitcanitearnintheshortrunandthelongrun?

Answer:

Thefirmproduceswhereitsmarginalcostequalsitsma