KIIT University 2008 micro-economics - exam paper

45. An unfair business practice of temporarily lowering prices to drive out competitors in an industry is known as:
a. Monopoly
b. Predatory Pricing
c. Price Fixing
d. Price gauging
e. Price Floor

46. When should a firm shutdown?
a. When profits are high, get out while you still can.
b. When avg. revenue equals the minimum avg. variable cost.
c. When avg. revenue equals the maximum avg. variable cost.
d. When avg. revenue equals the maximum avg. fixed cost.
e. When avg. revenue equals the minimum avg. fixed cost.

47. The maximizing profit rule says to produce where:
a. avg. cost equals marginal revenue.
b. Marginal cost equals avg. cost.
c. Marginal revenue equals marginal cost.
d. avg. cost equals avg. revenue.
e. None of the above.




48. The breakeven point is where:
a. (Price X Quantity) equals avg. cost
b. Marginal cost equals avg. cost.
c. Marginal revenue equals marginal cost.
d. avg. cost equals avg. revenue.
e. a and d

49. What is collusion?
a. several business acting together to fix the price in the market place.
b. Oligopolies trying to act collectively as a Monopoly.
c. 1 business setting its price lower than other business in an Oligopoly.
d. a and b
e. b and c

50. A kinked demand curve
a. Occurs in an Oligopoly
b. Occurs only in an Oligopoly
c. explains why rival Oligopolists keep their prices constant
d. a and c
e. All of the above

51. A monopolist’s demand curve:
a. is the identical as the market demand curve
b. is elastic
c. is inelastic
d. is perfectly inelastic
e. is perfectly elastic

52. The effect of advertising:
a. is very effective for business and consumers.
b. is not very effective for businesses and consumers.
c. is unknown for businesses and consumers
d. is effective for consumers but costly to businesses.
e. is effective for businesses but costly for consumers.

53. Nonprice competition only occurs in these 2 markets.
a. Oligopoly and Monopoly
b. Oligopoly and Monopolistic Competition

Earning:   Approval pending.