Question 1

Sam Edison obtains a patent on his new invention: trinoculars.In the long run,

Accepted Answer

A) he can earn only a normal profit 
B) he may suffer an economic loss and stop producing 
C) his monopoly power guarantees him a positive economic profit 
D) he will achieve productive efficiency 
E) he will achieve allocative efficiency 
A) he can earn only a normal profit 
B) he may suffer an economic loss and stop producing 
C) his monopoly power guarantees him a positive economic profit 
D) he will achieve productive efficiency 
E) he will achieve allocative efficiency

Question 2

Exhibit 9-11   If the monopolist in Exhibit 9-11 engages in perfect price discrimination, total revenue would be

Accepted Answer

A) $95, 300 
B) $104, 000 
C) $106, 080 
D) $187, 408 
E) equal to the area under the demand curve bounded by the horizontal axis and a quantity of 884 units 
A) $95, 300 
B) $104, 000 
C) $106, 080 
D) $187, 408 
E) equal to the area under the demand curve bounded by the horizontal axis and a quantity of 884 units

Question 3

A profit-maximizing monopolist produces an output level at which

Accepted Answer

A) marginal revenue is the greatest distance from marginal cost 
B) price is less than marginal cost 
C) the value to society of the last unit produced equals marginal cost 
D) marginal revenue equals marginal cost 
E) consumers wish to purchase less than what is produced because of high monopoly prices 
A) marginal revenue is the greatest distance from marginal cost 
B) price is less than marginal cost 
C) the value to society of the last unit produced equals marginal cost 
D) marginal revenue equals marginal cost 
E) consumers wish to purchase less than what is produced because of high monopoly prices

Question 4

If a firm is a natural monopoly, its

Accepted Answer

A) long-run average cost declines over the full range of market demand 
B) long-run average cost increases over the full range of market demand 
C) fixed cost declines over the full range of market demand 
D) fixed cost increases over the full range of market demand 
E) long-run average cost declines and marginal cost rises over the full range of market demand 
A) long-run average cost declines over the full range of market demand 
B) long-run average cost increases over the full range of market demand 
C) fixed cost declines over the full range of market demand 
D) fixed cost increases over the full range of market demand 
E) long-run average cost declines and marginal cost rises over the full range of market demand

Question 5

Exhibit 9-4   What is the profit-maximizing or loss-minimizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

Accepted Answer

A) 0 units 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units 
A) 0 units 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units

Question 6

Exhibit 9-12   The total revenue for the nondiscriminating monopolist in Exhibit 9-12 is

Accepted Answer

A) $0e ´ 0f 
B) $0c ´ 0g 
C) $0d ´ 0f 
D) $0b ´ 0f 
E) $0d 
A) $0e ´ 0f 
B) $0c ´ 0g 
C) $0d ´ 0f 
D) $0b ´ 0f 
E) $0d

Question 7

Exhibit 9-1   In Exhibit 9-1, the marginal revenue of the third unit is

Accepted Answer

A) $20 
B) $120 
C) $100 
D) $40 
E) $0 
A) $20 
B) $120 
C) $100 
D) $40 
E) $0

Question 8

Which of the following is true of monopoly?

Accepted Answer

A) There are no barriers to entry. 
B) The firm is a price taker. 
C) There are no close substitutes for the product being produced. 
D) There are many firms in the industry. 
E) The firm faces a horizontal demand curve. 
A) There are no barriers to entry. 
B) The firm is a price taker. 
C) There are no close substitutes for the product being produced. 
D) There are many firms in the industry. 
E) The firm faces a horizontal demand curve.

Question 9

Exhibit 9-12   The profit-maximizing level of output and price for the nondiscriminating monopolist in Exhibit 9-12 are

Accepted Answer

A) f and $a 
B) g and $c 
C) f and $b 
D) f and $d 
E) f and $e 
A) f and $a 
B) g and $c 
C) f and $b 
D) f and $d 
E) f and $e

Question 10

A monopolist's short-run supply curve is

Accepted Answer

A) its average fixed cost curve 
B) the part of the marginal cost curve above the average variable cost curve 
C) the part of the marginal cost curve below the average variable cost curve 
D) nonexistent 
E) its demand curve 
A) its average fixed cost curve 
B) the part of the marginal cost curve above the average variable cost curve 
C) the part of the marginal cost curve below the average variable cost curve 
D) nonexistent 
E) its demand curve

Question 11

Exhibit 9-3   The firm in Exhibit 9-3, which charges the same price to all customers, will produce where

Accepted Answer

A) MR = 0 
B) MR = MC 
C) MC < MR 
D) MC = ATC 
E) P = MC 
A) MR = 0 
B) MR = MC 
C) MC < MR 
D) MC = ATC 
E) P = MC

Question 12

Patent laws promote technical progress in all of the following ways except one.Which is the exception?

Accepted Answer

A) They allow other firms to copy successful products as soon as they are marketed. 
B) They prevent duplication of inventions. 
C) They provide a stimulus to innovation. 
D) They provide the inventor with a temporary monopoly. 
E) They increase a firm's incentive to incur the up-front costs of developing new products. 
A) They allow other firms to copy successful products as soon as they are marketed. 
B) They prevent duplication of inventions. 
C) They provide a stimulus to innovation. 
D) They provide the inventor with a temporary monopoly. 
E) They increase a firm's incentive to incur the up-front costs of developing new products.

Question 13

Innovation is the process of turning an invention into a marketable product.

Accepted Answer

A) True 
 B)False

Question 14

A profit-maximizing monopolist will always operate where demand is unit elastic.

Accepted Answer

A) True 
 B)False

Question 15

Suppose a single firm supplies all the ceramic windlasses in the U.S.The demand curve that firm faces is

Accepted Answer

A) elastic everywhere 
B) unit elastic everywhere 
C) inelastic everywhere 
D) perfectly inelastic everywhere 
E) elastic at the profit-maximizing quantity 
A) elastic everywhere 
B) unit elastic everywhere 
C) inelastic everywhere 
D) perfectly inelastic everywhere 
E) elastic at the profit-maximizing quantity

Question 16

Exhibit 9-3   The profit-maximizing output and price for the firm in Exhibit 9-3, which charges the same price to all customers, are

Accepted Answer

A) 117 and $14 
B) 150 and $22 
C) 150 and $14 
D) 117 and $22 
E) 117 and $24 
A) 117 and $14 
B) 150 and $22 
C) 150 and $14 
D) 117 and $22 
E) 117 and $24

Question 17

Exhibit 9-3   At the profit-maximizing output for the firm in Exhibit 9-3, the single price monopolist will earn a profit of ______ per unit of output?

Accepted Answer

A) $10 
B) $5 
C) $4 
D) $0 
E) -$5 
A) $10 
B) $5 
C) $4 
D) $0 
E) -$5

Question 18

If a monopolist must lower the price on all units in order to sell an additional unit,

Accepted Answer

A) it is impossible for the monopolist to maximize profit 
B) the monopolist will always lose profit when it increases quantity 
C) the monopolist will always lose revenue when it increases quantity 
D) price will always be greater than marginal revenue 
E) price will always be less than marginal revenue 
A) it is impossible for the monopolist to maximize profit 
B) the monopolist will always lose profit when it increases quantity 
C) the monopolist will always lose revenue when it increases quantity 
D) price will always be greater than marginal revenue 
E) price will always be less than marginal revenue

Question 19

Maximizing total revenue is the same as maximizing profit.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 9-15   In Exhibit 9-15, deadweight loss to consumers from a monopolist that does not price discriminate is represented by area

Accepted Answer

A) ecf 
B) eda 
C) dacb 
D) dafc 
E) abf 
A) ecf 
B) eda 
C) dacb 
D) dafc 
E) abf

Exam 9: A--Monopoly

Sam Edison obtains a patent on his new invention: trinoculars.In the long run,

Exhibit 9-11 If the monopolist in Exhibit 9-11 engages in perfect price discrimination, total revenue would be

A profit-maximizing monopolist produces an output level at which

If a firm is a natural monopoly, its

Exhibit 9-4 What is the profit-maximizing or loss-minimizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

Exhibit 9-12 The total revenue for the nondiscriminating monopolist in Exhibit 9-12 is

Exhibit 9-1 In Exhibit 9-1, the marginal revenue of the third unit is

Which of the following is true of monopoly?

Exhibit 9-12 The profit-maximizing level of output and price for the nondiscriminating monopolist in Exhibit 9-12 are

A monopolist's short-run supply curve is

Exhibit 9-3 The firm in Exhibit 9-3, which charges the same price to all customers, will produce where

Patent laws promote technical progress in all of the following ways except one.Which is the exception?

Innovation is the process of turning an invention into a marketable product.

A profit-maximizing monopolist will always operate where demand is unit elastic.

Suppose a single firm supplies all the ceramic windlasses in the U.S.The demand curve that firm faces is

Exhibit 9-3 The profit-maximizing output and price for the firm in Exhibit 9-3, which charges the same price to all customers, are

Exhibit 9-3 At the profit-maximizing output for the firm in Exhibit 9-3, the single price monopolist will earn a profit of ______ per unit of output?

If a monopolist must lower the price on all units in order to sell an additional unit,

Maximizing total revenue is the same as maximizing profit.

Exhibit 9-15 In Exhibit 9-15, deadweight loss to consumers from a monopolist that does not price discriminate is represented by area

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

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