Chapter9 Monopolistic Competition经济学英语题库.docx

1、Chapter9 Monopolistic Competition 经济学英语题库 Chapter 9 Monopolistic CompetitionMultiple Choice1. Because monopolistically competitive firms produce differentiated products, each firm (d)a.faces a demand curve that is horizontal.b.faces a demand curve that is vertical.c.has no control over product price

2、.d.has some control over product price.2. Which of the following conditions distinguishes monopolistic competition from perfect competition? (d) a. Number of sellers. b. Freedom of entry and exit. c. Small size firms. d. Differentiation of product.3. If existing fast-food firms realize sizable econo

3、mic profits in the short run, the demand curves of existing firms will (a)a.decrease and become more elastic.b.decrease and become less elastic.c.increase and become more elastic.d.increase and become less elastic.4. When a monopolistically competitive firm raises its price, (b)a.quantity demanded f

4、alls to zero.b.quantity demanded declines, but not to zero.c.the market supply curve shifts outward.d.quantity demanded remains constant.5. There are several reasons why demand curves may become more elastic. Among them are (b) a. the market becomes more monopolistic and cross elasticities approach

5、zero. b. the goods become less differentiated and more firms enter the industry. c. consumers have fewer substitutes and firms drop out of the industry. d. industry demand increases and consumers increase spending.6. Which of the following is a characteristic of oligopoly or monopolistic competition

6、, but not perfect competition? (a) a. Advertising and sales promotion. b. Profit maximization according to the MR = MC rule. c. Firms being price takers rather than price makers. d. Horizontal demand and marginal revenue curves.7. Product differentiation allows the firm to (b) a. raise price and low

7、er quantity demanded. b. raise price without suffering a substantial loss of sales. c. shift the market demand curve to the left. d. decrease barriers to entry.8. The maximum total short run economic profit, or minimum loss, for the monopolistically competitive firm in this figure is a. zero. b. a p

8、rofit of $575.00. c. a profit of $2,000.00. d. a loss of $375.00.9. Cecilias Caf is a monopolistic competitor. If Cecilias is currently producing at the output level where her average total cost is minimized and the caf is earning economic profits, then in the long run output will (a) a. decrease an

9、d average total cost will increase. b. decrease and average total cost will decrease. c. remain unchanged as Cecilias is doing the best it can. d. increase and average total costs will decrease.10. In the long run, freedom of entry into a market forces a (b) to charge a price equal to average total

10、cost, but average total cost exceeds its minimum levela.perfectly competitive firmb.monopolistically competitive firmc.oligopolistic firmd.pure monopoly11. Which of the following best describes the idea of excess capacity in monopolistic competition? (b) a. Firms produce more output than is socially

11、 desirable. b. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve. c. due to product differentiation, firms choose output levels where PATC. d. firms keep some surplus output on hand in case there is a shift in the demand for their product.12. W

12、hich of the following individuals quoted below is least likely to argue that excess capacity in monopolistically competitive industries is a waste of resources? (b) a. “An automobile is transportation, nothing else.” b. “Tomatoes or no tomatoes. The choice of toppings on a burger can be important to

13、 a consumer these days when individualism is increasingly important to people.” c. “Gasoline is gasoline no matter what the brand name.”d. “I take the airline that will get me from A to B at the lowest price.”13. The traditional view of monopolistic competition holds that this type of industrial str

14、ucture is inefficient because (b) a. there are too few firms to reach an efficient level of production. b. firms do not operate at the output that minimizes average costs. c. advertising is not used extensively enough to yield an efficient differentiation of the products. d. consumers do not have en

15、ough choice among the product varieties available.14. Monopolistic competition is considered by some to be inefficient because (a) a. price exceeds marginal cost. b. output exceeds capacity output. c. long run profits are positive. d. of all of the above.15. Perhaps its not a problem at all, but if

16、“too much choice” is a problem for consumers, it would occur in which market structure(s)? ( c ) a. Perfect competition. b. Monopoly. c. Monopolistic competition. d. Perfect competition and monopolistic competition.16. Which of the following might be an effect of advertising? (d) a. Increased produc

17、t differentiation. b. Increased total costs of production. c. Increased demand for the product. d. All of the above.17. In the long run under monopolistic competition, when firms advertise, (a) a. they will still earn zero economic profit. b. they can earn positive economic profit by increasing mark

18、et share. c. the market price must fall. d. the market price must rise.18. Advertising (d) a. provides information about products, including prices and seller locations. b. has been proven to increase competition and reduce prices compared to markets without advertising. c. signals quality to consum

19、ers, since firms spend so much money on ads. d. does all of the above.29. Critics of advertising argue that (a) a. advertising wastes resources because it creates an image without necessarily improving product quality.b. advertising lowers barriers to entry into an industry because new firms can mor

20、e easily establish themselves as competitors. c. advertising increases competition by providing information about prices. d. advertising encourages monopolization of markets by raising entry barriers too high.30. Many airlines promise “frequent flyer” miles to passengers who fly their airlines regul

21、arly. This is an example of a firm attempting to create (d) a. price discrimination. b. a predatory pricing scheme. c. discounting below marginal costs. d. brand loyalty.31. One of the reasons that Kodak and Fuji films advertise so much is that (c ) a. each hopes to create a natural monopoly.b. they

22、 are in a perfectly competitive industry where advertising is the differencebetween economic and normal profits. c. they want to develop brand loyalty. d. they want to increase price elasticities of demand.32. If some coffee drinkers continue to buy Maxwell House coffee even when Folgers coffee is o

23、n sale and cheaper, it may be a result of ( c ) a. irrational consumer behavior. b. a high cross elasticity between the two goods.c.brand loyalty.d.Maxwell House being a monopoly.Short Answer And Essay1. How do the characteristics of perfect competition and monopolistic competition differ?Answer:In

24、monopolistic competition, the products sold are similar but differentiated, thereby enabling firms to compete on the basis of product development and marketing to further differentiate their products. In perfect competition the products are identical, thereby eliminating the opportunity for firms to

25、 compete by differentiating their product.2. Why is collusion about the price and amount of output impossible in monopolistic competition?Answer:The smaller the number of firms, the more likely collusion is to occur. Monopolistic competition has too many firms for collusion to be successful. 3. What

26、 do demand and marginal revenue curves look like in monopolistic competition? How do they compare to the demand and marginal revenue curves in perfect competition and monopoly?Answer:In monopolistic competition, the product is differentiated. This fact gives each firm some control over price, so eac

27、h firms demand curve is downward sloping. Because there are many close substitutes for these firms goods, demand is elastic. These firms must lower their price to sell more; therefore the marginal revenue curve is beneath the demand curve. In perfect competition, the product is homogeneous, which ma

28、kes firms price-takers, able to sell as much as they wish at the market price. Therefore, marginal revenue equals price, and the marginal revenue curve and the demand curve are the same and are horizontal. In monopoly, there is only one firm. The firm faces the market demand, which is steep, because

29、 there are no close substitutes for the good. The firm must lower its price to sell more, so for a single-price monopoly, the marginal revenue curve is beneath the demand curve.4. What is the Herfindahl-Hirschman Index and what does it measure?Answer:The Herfindahl-Hirschman Index, or HHI, is an ind

30、ex used to measure the extent to which a market is dominated by a small number of firms. The HHI equals the sum of the squared percentage market shares of each of the 50 largest firms in the market. A monopoly will have a HHI of 10,000 whereas perfect competition will have a small HHI.5. “A firm in

31、monopolistic competition maximizes its profit by producing where its price is equal to its marginal cost.” Is the previous statement correct or incorrect?Answer:The statement is incorrect. A firm in monopolistic competition maximizes its profit by producing where its marginal revenue equals its marg

32、inal cost. Because the marginal revenue is less than the price for a firm in monopolistic competition, it definitely is not the case that the firm produces where its price equals its marginal cost!6. How does a firm in monopolistic competition determine its price and quantity? What type of profit can it earn in the short run and the long run?Answer:The firm produces where its marginal cost equals its ma