1. Firms that had virtual monopolies, that is control over at least 80% of industry production, because of control over an essential resource include all of the following except the
A) National Football League in the 1950s.
B) American Tobacco Company.
C) International Nickel Company.
D) General Motors Company.
E) Standard Oil Company.

2. Which of the following is false?
A) The basis for monopoly in the automobile industry would most likely be economies of scale.
B) The DeBeers Diamond Company is NOT a natural monopoly.
C) Big business has a great deal of economic and political power.
D) The average American CEO pulls down 25 to 40 times the earnings of the average worker.

3. If the marginal cost were $21, output would be
Output Price
1 $25
2 $23
3 $21
4 $19
5 $17
A) 1.
B) 2.
C) 3.
D) 4.
E) 5.

4. The marginal revenue that would be derived from the production of a second unit is
A) $17.
B) $19.
C) $21.
D) $23.
E) $25.

5. For a monopolist, the price of the product
A) always equals the marginal revenue.
B) is always less than the marginal revenue.
C) exceeds the marginal revenue.
D) always equals the marginal cost of the product.

6. Monopoly profit
A) equals (price - ATC) times quantity sold.
B) equals price times quantity sold.
C) exists only in the short run.
D) exists because no entry barriers exist.

7. Which of the following is NOT a characteristic of a monopoly?
A) A great deal of political power
B) No close substitute products
C) The ability to make an economic profit in the long run
D) Operating at the lowest point on the ATC curve

8. If the firm is maximizing profits or minimizing losses, it is producing _____ units of output and charging a price of ______.
A) 50 units; $10
B) 50 units; $18.40
C) 60 units; $12
D) 60 units; $16.80

9. A monopoly firm selling moustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of moustache wax
A) is greater than $5.
B) is equal to $5.
C) is less than $5.
D) is none of the choices.

10. The monopolist often charges his customers _______ prices and provides ________ service than he would if he had competitors. A) higher; better
B) higher; poorer
C) lower; better
D) lower; poorer.

11. Statement I. Deregulating the airlines, trucking, and long-distance phone calling has led to lower prices for consumers. Statement II. It would be fair to say that, basically, deregulation has been very successful.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

12. The greatest damage caused by the corporate scandals of the last few years was to ________.
A) the employees of those companies
B) the U.S. Treasury, which was bilked out of billions of tax dollars
C) the customers of those companies
D) the public trust in financial markets

13. Each of the following statements is true except
A) Most of the world's largest corporate mergers took place between American firms.
B) There have been more large mergers in the U.S. in the communications industry than in any other industry.
C) The corporate scandals in recent years were all caused by no more than half a dozen crooks.
D) The most important piece of antitrust legislation is the Sherman Antitrust Act.

14. Which of the following laws stated that attempts to monopolize, conspiracies in restraint of trade, and conspiracies to monopolize were illegal?
A) The Federal Trade Commission Act
B) The Clayton Act
C) The Sherman Antitrust Act
D) All of the choices.
E) None of the choices.

15. In general we could say that the decade of the 1980s was a time of
A) more regulation.
B) less regulation.
C) little change in degree of regulation.

16. The Clayton Act of 1914
A) outlawed all mergers.
B) abolished the Sherman Act of 1890.
C) outlawed specific business practices that discouraged competition.
D) reduced the federal government's antitrust authority

17. Which statement is true?
A) The Federal Trade Commission Act is the most important antitrust law on the books.
B) The most important antitrust legislation was passed in the last three decades.
C) The Clayton Act outlawed interlocking directorates.
D) None is true.

18. Statement I. The trend of billion-dollar mergers and takeovers of the last 15 years has been almost exclusively limited to U.S. firms.Statement II. The 1999 merger between Exxon and Mobil oil companies was subject to antitrust regulation by the U.S. Justice Department and the European Commission.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

19. Which is the most accurate statement?
A) We have never had corporate corruption until around the year 2000.
B) If you asked the average American if he believed all corporate officers were honest, he would answer "Yes."
C) Enron is the only large corporation that was caught up in a financial scandal since the 1980s.
D) Although it may be years before we know the full damages incurred, it seems very likely that the corporate financial scandals of recent years will end up costing those corporations and the public billions of dollars.

20. Which one of the industries listed below has had the largest mergers during the last 5 years?
A) Steel manufacturing
B) Automobile production
C) Communications
D) Trucking

21. You are most likely to be a union member if you
A) live in a right-to-work state.
B) live in the South.
C) are a government employee.
D) work in retailing.E) work for a foreign-owned auto plant.

22. The split between the AFL and the CIO in 1935 had to do with
A) whether unions were to be organized along craft lines or industry lines.
B) whether the unions were to pursue political goals or economic goals.
C) communist influence in the American labor movement.
D) corruption in the American labor movement.

23. The amount of work time lost because of strikes has been declining fairly steadily since
A) 1950.
B) 1960.
C) 1970.
D) 1990.

24. Why were there so few strikes from 1942-1945?
A) Unions were too weak to strike.
B) Union members were afraid that their employers would move their factories to other countries.
C) It was considered unpatriotic to strike while we were at full-scale war.
D) Labor leaders were afraid that strikes would force financially weak employers out of business.

25. Which statement is true about labor unions in the United States?
A) They have always been very popular.
B) They did not gain widespread acceptance until the 1940s.
C) They have never gained widespread acceptance.
D) None of these statements are true of labor unions in the U.S.

26. Statement I. The United Food and Commercial Workers have been successful in organizing unions at Wal-Mart stores around the country. Statement II. Because Wal-Mart's employee pay and benefits were about $10-14 an hour less than those at competing California unionized supermarkets, three competing supermarket chains demanded wage and other concessions from their employees to be able to compete with Wal-Mart.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false

27. In what decades did labor unions gain the most members?
A) The 1910s and 1920s
B) The 1930s and 1940s
C) The 1950s and 1960s
D) The 1970s and 1980s

28. Which statement is true?
A) Most collective bargaining negotiations end in strikes.
B) The two key provisions in a collective bargaining agreement are (1) wages and hours and (2) job security and seniority.
C) Most strikes have disrupted our economy. D) None of these statements is true.

29. Collective bargaining agreements in the United States generally
A) are negotiated for only a 1-year period.
B) are very detailed and specify wages levels and fringe benefits for a period of 2-3 years.
C) cover wages only.
D) are negotiated for only a 6-month period.

30. Each of these is a craft union except
A) the plumbers' union.
B) the textile workers' union.
C) the musicians' union.
D) the air traffic controllers' union.

31. Winner-take-all markets may be applied to the
A) winnings of those who hit the lottery.
B) winnings of gamblers.
C) the luck of those who inherit billions of dollars.
D) the compensation of CEOs of large corporations

32. Among these countries, which has the highest hourly wage and fringe benefits in manufacturing?
A) Germany
B) Japan
C) The U.S.
D) Canada

33. Sue Ann Buchanan, can make $800,000 on the pro tennis tour, but would be willing to do it for $200,000. Her economic rent is
A) $200,000.
B) $600,000.
C) $800,000.
D) $1,000,000.

34. Which statement is true?
A) Most people would put in a maximum workweek of 48 hours no matter what the pay.
B) As one's income rises, eventually the income effect outweighs the substitution effect.
C) As one's income rises, eventually the substitution effect outweighs the income effect.
D) The "backward bending" supply curve is not really backward bending.

35. Suppose your economics professor earns an equal annual salary of $40,000. The professor loves teaching and would not quit her job if her pay were reduced to $15,000 per year. Your professor is earning annual economic rent of
A) $40,000.
B) $25,000.
C) $55,000.
D) $15,000

36. In general output per hour rises at _____ real wages.
A) a much higher rate than
B) a somewhat higher rate than
C) about the same rate as
D) a somewhat lower rate than
E) a much lower rate than

37. About 1 out of every ________ workers earns less than $9 an hour.
A) 2
B) 4
C) 7
D) 10

38. Real wages have fallen since 1973 for all the following reasons except
A) millions of high paying manufacturing jobs have migrated to low wage countries.
B) the slowing down of productivity growth.
C) the introduction of a Canadian style national health care system in the United States.
D) the switch from high paying manufacturing jobs to lower paying service sector jobs.

39. Which statement is false?
A) Differences in wage rates are partially explained by differences in productivity.
B) In general, when output per labor-hour increases, real wages rise by a larger percentage.
C) The demand for labor in a particular market is the sum of all the firms' MRP curves.
D) If you are earning $20,000 a year today and you were to earn $40,000 a year 10 years from now, your money wages have increased.

40. Which of the following is not true about the theory of the dual labor market?
A) It is a class theory of employment.
B) The dividing line between the primary and secondary markets is whether you have a college degree.
C) Jobs in the secondary market pay better than those in the primary market.
D) This theory does not take into account the huge middle level of occupations-nursing, social work, and non-college-graduate positions in insurance, banking, and retailing.