Question

1. A Lorenz curve measures the ___ on the vertical axis.

A) cumulative percentage of families

B) demand of families on welfare

C) cumulative percentage of money income

D) cumulative percentage of family wealth

2. A Lorenz curve that is perfectly straight indicates

A) that a small portion of the population accounts for most of the income.

B) that society is very rich.

C) that a large portion of the population accounts for most of the income.

D) complete income equality

3. A bilateral monopoly means

A) that a monopsonistic employer bargains with two unions

B)that a monopsonistic employer bargains with a monopoly.

C)that an industrial union bargains with a two-firm oligopoly.

D)that a monopsonistic employer bargains with both an industrial and a craft union.

4. A cartel will break down more easily if

A) there are only a few members.

B) market prices can be observed easily.

C) there are many entrants in the industry

D) industry demand is very stable.

5. A concentration ratio gives

A) the average size of the firms in an industry.

B) the total sales of four or eight of the mid-sized firms in the industry

C) the percentage of all sales contributed by the four or eight largest firms in the industry.

D) the sales of the four largest firms in the industry divided by the sales of the eight largest firms in the industry

6. A dominant strategy is one that

A) every participant in the game will follow.

B) always yields the highest benefit regardless of what the other players do.

C) yields a position of the winner so long as the other participants act as planned.

D) turns a negative-sum game into a positive-sum game.

7. A firm in a monopolistically competitive market determines the profit-maximizing output at which

A) MR=AVC

B) MR=ATC

C) MR=P

D) MR=MC.

8. A good example of a monopolistic competitive industry is

A) the four major textbook publishers together with nearly 90 percent of industry sales.

B) the country music industry

C) the federal highway system.

D) wheat farms in the United States.

9. A group of firms that try to work together to earn monopoly profits is called a(n)

A) public enterprise.

B) patent.

C) natural monopoly.

D) cartel.

10. A local utility is an example of

A) perfect competition.

B) oligopoly.

C) monopoly

D) monopolistic competition.

please help me with the 1-10 multiple choice questions !

Answer 1

Answer 1 (C) The Lorenz curve represents a graph of the distribution of income or of wealth in an economy. It was developed by Max O. Lorenz in 1905 that represents inequality of the wealth distribution.
The percentage of households is plotted on the horizontal axis and the percentage of income is measured on the y-axis.

Answer 2 (d) A Lorenz curve that is perfectly straight indicates complete income equality.

Answer 3 (b) A bilateral monopoly is a type of market structure consisting of both a monopoly i.e.a single seller and a monopsony i.e. a single buyer.

Answer 4(C) Cartels are formed when a few large producers take a decision to co-operate with respect to aspects of their market. After the formation of cartels, group of producers can fix prices for its members, so that price war can be avoided.

Answer 5 (A) The concentration ratio is the sum of the market share percentage held by the largest specified number of firms in an industry. In other words, the concentration ratio shows whether an industry is comprised of a few large firms or it is composed of many small firms.

Answer 6 Option B is the answer.

Answer. 7 Option D is the right answer.

Answer 8. (A) Monopolistic Competiton is a blend of Monopoly and Perfect competition. It has traits of monopoly market as it's product is differentiated. It has traits of Perfect competition as it has large number of sellers and buyers, there is perfect knowledge about market and technology and there is freedom of entry and exit.

Answer 9. Option D is the right answer.

Amswer 10.Option C is the right answer.