Question 1

Use the figure below to answer the following questions.   Figure 12.3.3
-Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates producer surplus?

Accepted Answer

A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD 
A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD

Question 2

Donna owns the only dog grooming salon on Lonely Island.If Donna can price discriminate between dog owners who are seniors and those who are not,her economic profit will be ________ than if she does not price discriminate and the number of dog groomings will be ________ if she does not price discriminate.

Accepted Answer

A) greater;more than 
B) greater;less than 
C) less;more than 
D) less;less than 
E) greater;the same as 
A) greater;more than 
B) greater;less than 
C) less;more than 
D) less;less than 
E) greater;the same as

Question 3

To prevent monopoly from arising,there must be

Accepted Answer

A) a single supplier of a good in the market. 
B) no close substitutes for the good. 
C) barriers preventing entry of other firms. 
D) freedom of entry into the market. 
E) economies of scale. 
A) a single supplier of a good in the market. 
B) no close substitutes for the good. 
C) barriers preventing entry of other firms. 
D) freedom of entry into the market. 
E) economies of scale.

Question 4

Rent seeking

Accepted Answer

A) is a variable cost and with rent seeking the monopoly becomes more efficient. 
B) decreases average total cost and with rent seeking the monopoly becomes more efficient. 
C) increases deadweight loss above the original monopoly deadweight loss,but the monopoly continues to produce the same inefficient quantity. 
D) decreases consumer surplus and with rent seeking the monopoly becomes more efficient. 
E) decreases deadweight loss. 
A) is a variable cost and with rent seeking the monopoly becomes more efficient. 
B) decreases average total cost and with rent seeking the monopoly becomes more efficient. 
C) increases deadweight loss above the original monopoly deadweight loss,but the monopoly continues to produce the same inefficient quantity. 
D) decreases consumer surplus and with rent seeking the monopoly becomes more efficient. 
E) decreases deadweight loss.

Question 5

Use the figure below to answer the following questions.   Figure 12.3.1
-Refer to Figure 12.3.1.The efficient quantity is

Accepted Answer

A) 20 units. 
B) 40 units. 
C) 60 units. 
D) 80 units. 
E) 30 units. 
A) 20 units. 
B) 40 units. 
C) 60 units. 
D) 80 units. 
E) 30 units.

Question 6

Use the figure below to answer the following questions.   Figure 12.2.3
-Refer to Figure 12.2.3.Assume this firm is a single-price monopoly.What is the profit-maximizing price to charge for the tickets?

Accepted Answer

A) $5.00 
B) $4.00 
C) $3.00 
D) $2.50 
E) $3.50 
A) $5.00 
B) $4.00 
C) $3.00 
D) $2.50 
E) $3.50

Question 7

Use the figure below to answer the following questions.   Figure 12.3.3
-Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates consumer surplus?

Accepted Answer

A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD 
A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD

Question 8

Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Accepted Answer

A) deadweight loss from monopoly. 
B) monopoly's producer surplus. 
C) deadweight loss plus the monopoly's producer surplus. 
D) deadweight loss minus the monopoly's producer surplus. 
E) consumer surplus lost plus producer surplus lost. 
A) deadweight loss from monopoly. 
B) monopoly's producer surplus. 
C) deadweight loss plus the monopoly's producer surplus. 
D) deadweight loss minus the monopoly's producer surplus. 
E) consumer surplus lost plus producer surplus lost.

Question 9

Use the table below to answer the following questions.
Table 12.4.1  
-Table 12.4.1 shows the demand schedule faced by a monopoly.If the monopoly is a perfect price-discriminating monopoly the marginal revenue from the sale of the 3rd unit of output is

Accepted Answer

A) $2. 
B) $6. 
C) $4. 
D) $3. 
E) $5. 
A) $2. 
B) $6. 
C) $4. 
D) $3. 
E) $5.

Question 10

One difference between perfectly competitive markets and a single-price monopoly is that

Accepted Answer

A) marginal revenue equals marginal cost for perfectly competitive firms,but not for single-price monopolists. 
B) marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists. 
C) price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms. 
D) marginal revenue equals price for perfectly competitive firms,but not for single-price monopolists. 
E) marginal revenue equals marginal cost for single-price monopolists but not for perfectly competitive firms. 
A) marginal revenue equals marginal cost for perfectly competitive firms,but not for single-price monopolists. 
B) marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists. 
C) price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms. 
D) marginal revenue equals price for perfectly competitive firms,but not for single-price monopolists. 
E) marginal revenue equals marginal cost for single-price monopolists but not for perfectly competitive firms.

Question 11

A monopoly is a market with a single firm that

Accepted Answer

A) produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B) purchases its factors of production from only one supplier because of a barrier preventing it from buying from other suppliers. 
C) produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D) cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price. 
E) produces its good or service using labour from a single source,which is usually a union. 
A) produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B) purchases its factors of production from only one supplier because of a barrier preventing it from buying from other suppliers. 
C) produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D) cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price. 
E) produces its good or service using labour from a single source,which is usually a union.

Question 12

For a monopoly that practises perfect price discrimination,the market

Accepted Answer

A) supply curve is horizontal. 
B) supply curve is the same as the marginal revenue curve. 
C) demand curve is the same as the marginal cost curve. 
D) demand curve is the same as the marginal revenue curve. 
E) demand curve is horizontal. 
A) supply curve is horizontal. 
B) supply curve is the same as the marginal revenue curve. 
C) demand curve is the same as the marginal cost curve. 
D) demand curve is the same as the marginal revenue curve. 
E) demand curve is horizontal.

Question 13

A natural monopoly exists when

Accepted Answer

A) the government protects the firm by granting an exclusive franchise. 
B) production can take place with constant returns to scale. 
C) there are no rivals in the market. 
D) one firm can supply the entire market at a lower cost than two or more firms. 
E) the average total cost curve is upward sloping. 
A) the government protects the firm by granting an exclusive franchise. 
B) production can take place with constant returns to scale. 
C) there are no rivals in the market. 
D) one firm can supply the entire market at a lower cost than two or more firms. 
E) the average total cost curve is upward sloping.

Question 14

Rent seeking

Accepted Answer

A) is an attempt by landlords to financially harm tenants. 
B) is the pursuit of wealth by capturing economic rent. 
C) is an attempt by individuals to avoid paying taxes. 
D) occurs when owners of a monopoly sell the firm at the highest possible price. 
E) is a means of eliminating deadweight loss. 
A) is an attempt by landlords to financially harm tenants. 
B) is the pursuit of wealth by capturing economic rent. 
C) is an attempt by individuals to avoid paying taxes. 
D) occurs when owners of a monopoly sell the firm at the highest possible price. 
E) is a means of eliminating deadweight loss.

Question 15

A price cap regulation

Accepted Answer

A) is a price floor. 
B) is a price ceiling. 
C) is illegal. 
D) delivers marginal cost pricing. 
E) sets price equal to average variable cost. 
A) is a price floor. 
B) is a price ceiling. 
C) is illegal. 
D) delivers marginal cost pricing. 
E) sets price equal to average variable cost.

Question 16

Use the figure below to answer the following question.   Figure 12.1.1
-Refer to Figure 12.1.1.The quantity demanded by the market is 8 million cubic metres a month.This market is

Accepted Answer

A) a legal monopoly. 
B) served by a perfect price discriminating monopoly. 
C) served by many firms each making an economic profit. 
D) served by many firms each incurring an economic loss. 
E) a natural monopoly. 
A) a legal monopoly. 
B) served by a perfect price discriminating monopoly. 
C) served by many firms each making an economic profit. 
D) served by many firms each incurring an economic loss. 
E) a natural monopoly.

Question 17

Social interest theory states that

Accepted Answer

A) public officials favour consumers over producers. 
B) regulations promote the attainment of an efficient outcome. 
C) regulations promote the attainment of an inefficient outcome. 
D) regulation maximizes economic profit. 
E) rate of return regulation is best for all parties. 
A) public officials favour consumers over producers. 
B) regulations promote the attainment of an efficient outcome. 
C) regulations promote the attainment of an inefficient outcome. 
D) regulation maximizes economic profit. 
E) rate of return regulation is best for all parties.

Question 18

If the demand for its good or service is elastic,a monopoly's

Accepted Answer

A) total revenue is unchanged when the firm lowers its price. 
B) total revenue decreases when the firm lowers its price. 
C) marginal revenue is positive. 
D) marginal revenue is zero. 
E) marginal revenue is negative. 
A) total revenue is unchanged when the firm lowers its price. 
B) total revenue decreases when the firm lowers its price. 
C) marginal revenue is positive. 
D) marginal revenue is zero. 
E) marginal revenue is negative.

Question 19

Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes Lipitor,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are

Accepted Answer

A) only Pfizer. 
B) Canada Post,Pfizer,and Rogers Communications. 
C) Canada Post and Pfizer. 
D) only Canada Post. 
E) only Rogers Communications. 
A) only Pfizer. 
B) Canada Post,Pfizer,and Rogers Communications. 
C) Canada Post and Pfizer. 
D) only Canada Post. 
E) only Rogers Communications.

Question 20

Use the figure below to answer the following questions.   Figure 12.4.2
-Refer to Figure 12.4.2.Assume this monopoly practises perfect price discrimination.What is total revenue?

Accepted Answer

A) $110 
B) $210 
C) $310 
D) $120 
E) $105 
A) $110 
B) $210 
C) $310 
D) $120 
E) $105

Use the figure below to answer the following questions. Figure 12.3.3 -Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates producer surplus?

Donna owns the only dog grooming salon on Lonely Island.If Donna can price discriminate between dog owners who are seniors and those who are not,her economic profit will be than if she does not price discriminate and the number of dog groomings will be if she does not price discriminate.

To prevent monopoly from arising,there must be

Rent seeking

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1.The efficient quantity is

Use the figure below to answer the following questions. Figure 12.2.3 -Refer to Figure 12.2.3.Assume this firm is a single-price monopoly.What is the profit-maximizing price to charge for the tickets?

Use the figure below to answer the following questions. Figure 12.3.3 -Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates consumer surplus?

Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Use the table below to answer the following questions. Table 12.4.1 -Table 12.4.1 shows the demand schedule faced by a monopoly.If the monopoly is a perfect price-discriminating monopoly the marginal revenue from the sale of the 3rd unit of output is

One difference between perfectly competitive markets and a single-price monopoly is that

A monopoly is a market with a single firm that

For a monopoly that practises perfect price discrimination,the market

A natural monopoly exists when

Rent seeking

A price cap regulation

Use the figure below to answer the following question. Figure 12.1.1 -Refer to Figure 12.1.1.The quantity demanded by the market is 8 million cubic metres a month.This market is

Social interest theory states that

If the demand for its good or service is elastic,a monopoly's

Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes Lipitor,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are

Use the figure below to answer the following questions. Figure 12.4.2 -Refer to Figure 12.4.2.Assume this monopoly practises perfect price discrimination.What is total revenue?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 12: Monopoly

Use the figure below to answer the following questions. Figure 12.3.3 -Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates producer surplus?

To prevent monopoly from arising,there must be

Rent seeking

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1.The efficient quantity is

Use the figure below to answer the following questions. Figure 12.2.3 -Refer to Figure 12.2.3.Assume this firm is a single-price monopoly.What is the profit-maximizing price to charge for the tickets?

Use the figure below to answer the following questions. Figure 12.3.3 -Consider Figure 12.3.3.If the market is perfectly competitive,which area indicates consumer surplus?

Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Use the table below to answer the following questions. Table 12.4.1 -Table 12.4.1 shows the demand schedule faced by a monopoly.If the monopoly is a perfect price-discriminating monopoly the marginal revenue from the sale of the 3rd unit of output is

One difference between perfectly competitive markets and a single-price monopoly is that

A monopoly is a market with a single firm that

For a monopoly that practises perfect price discrimination,the market

A natural monopoly exists when

Rent seeking

A price cap regulation

Use the figure below to answer the following question. Figure 12.1.1 -Refer to Figure 12.1.1.The quantity demanded by the market is 8 million cubic metres a month.This market is

Social interest theory states that

If the demand for its good or service is elastic,a monopoly's

Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes Lipitor,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are

Use the figure below to answer the following questions. Figure 12.4.2 -Refer to Figure 12.4.2.Assume this monopoly practises perfect price discrimination.What is total revenue?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters