Tackle the Test: Multiple-Choice Questions

1. Question

   The Sherman Antitrust Act of 1890 sought to do which of the following?

   A.

   break up existing monopolies

   B.

   prevent the creation of new monopolies

   C.

   stop monopoly behavior engaged in by trusts

   D.

   respond to the increasing power of trusts in the economy

   E.

   all of the above

   The Sherman Antitrust Act of 1890 sought to do which of the following?

2. Question

   A natural monopoly exists when, over the relevant range, increasing the output level results in a lower

   A.

   total cost.

   B.

   average total cost.

   C.

   average variable cost.

   D.

   average fixed cost.

   E.

   marginal cost.

   A natural monopoly exists when, over the relevant range, increasing the output level results in a lower

3. Question

   Which of the following is the most common policy approach to a natural monopoly?

   A.

   public ownership

   B.

   price regulation

   C.

   quantity regulation

   D.

   quality regulation

   E.

   a breakup of the monopoly into smaller firms

   Which of the following is the most common policy approach to a natural monopoly?

4. Question

   For questions 4 and 5, refer to the graph below.

   

   Without government intervention, a monopolist will produce ______ and charge ______.

   A.

   Q3 P3

   B.

   Q2 P4

   C.

   Q2 P1

   D.

   Q1 P3

   E.

   Q1 P2

   Without government intervention, a monopolist will produce ______ and charge ______.

5. Question

   The lowest regulated price the government could expect this monopolist to maintain in the long run is

   A.

   P1.

   B.

   P2.

   C.

   P3.

   D.

   P4.

   E.

   P5.

   The lowest regulated price the government could expect this monopolist to maintain in the long run is