#1
Which of the following is NOT a characteristic of monopolistic competition?
Many buyers and sellers
Product differentiation
Price taker
Free entry and exit of firms
#2
What is the primary function of a price ceiling?
To establish a minimum price for a product
To prevent prices from rising above a certain level
To encourage firms to produce more goods
To increase consumer purchasing power
#3
What is the primary objective of a price floor?
To prevent prices from falling below a certain level
To encourage firms to produce less
To increase consumer purchasing power
To establish a maximum price for a product
#4
What is the likely impact of a price ceiling set below the equilibrium price in a market?
Excess demand
Excess supply
Increase in market efficiency
Decrease in consumer surplus
#5
What is the likely consequence of imposing a price floor above the equilibrium price in a market?
Excess demand
Excess supply
Decrease in market efficiency
Increase in producer surplus
#6
In economics, what does 'elasticity of demand' measure?
The responsiveness of quantity demanded to changes in price
The total quantity demanded in the market
The willingness of consumers to buy goods
The responsiveness of quantity supplied to changes in price
#7
Which pricing strategy involves setting prices just below a whole number?
Prestige pricing
Odd pricing
Penetration pricing
Skimming pricing
#8
Which of the following is an example of a non-price rationing mechanism?
Coupons
Minimum wage laws
Sales tax
Subsidies
#9
What is the relationship between price elasticity of demand and total revenue?
They move in the same direction
They move in opposite directions
There is no relationship between them
It depends on the elasticity coefficient
#10
Which of the following is NOT a method of non-price rationing?
Lottery
Queueing
Price discrimination
First-come, first-served
#11
What is the formula for calculating price elasticity of demand?
Change in quantity demanded / Change in price
Percentage change in quantity demanded / Percentage change in price
Change in price / Change in quantity demanded
Percentage change in price / Percentage change in quantity demanded
#12
What is the main objective of using price discrimination?
To increase total revenue
To maintain market share
To reduce production costs
To achieve economies of scale
#13
Under what conditions is rationing likely to be more efficient than price controls in distributing scarce goods?
When consumers have equal purchasing power
When demand is highly elastic
When the government can accurately determine need
When there are significant negative externalities associated with the goods
#14
Which of the following is NOT a determinant of price elasticity of demand?
Availability of substitutes
Income level
Necessity of the good
Time period considered
#15
In the context of pricing strategies, what is 'price skimming'?
Setting prices slightly above the production cost
Setting low prices to gain market share quickly
Setting high initial prices and then gradually lowering them
Setting prices below the equilibrium price
#16
In the context of price discrimination, what does the 'law of one price' suggest?
Different consumers pay different prices for the same good
The same good should have the same price in different markets
Prices should be set based on consumers' willingness to pay
Prices should vary based on production costs
#17
Which of the following is an example of perfect price discrimination?
Student discounts at movie theaters
Senior citizen discounts at restaurants
Health insurance premiums based on age and health status
Negotiating prices individually with each customer