Question 1

Use the figure below to answer the following questions.   Figure 12.3.3
-Consider Figure 12.3.3.Which area indicates the deadweight loss from a single-price monopoly?

Accepted Answer

A) EACF 
B) ACD 
C) ABD 
D) BCD 
E) EADCF 
A) EACF 
B) ACD 
C) ABD 
D) BCD 
E) EADCF

Question 2

Use the figure below to answer the following question.   Figure 12.4.3
-Refer to Figure 12.4.3.The outcome is efficient if

Accepted Answer

A) the monopoly is able to perfectly price discriminate. 
B) the price consumers pay is greater than marginal cost. 
C) the price consumers pay is less than marginal cost. 
D) the quantity produced is 80 units. 
E) the quantity produced is 20 units. 
A) the monopoly is able to perfectly price discriminate. 
B) the price consumers pay is greater than marginal cost. 
C) the price consumers pay is less than marginal cost. 
D) the quantity produced is 80 units. 
E) the quantity produced is 20 units.

Question 3

Use the information below to answer the following questions.
Fact 12.5.1
Cascade Springs Inc.is a natural monopoly that bottles water from a spring high in the Rocky Mountains.The total fixed cost it incurs is $80,000,and its marginal cost is 10 cents a bottle.The demand curve for Cascade Springs bottled water is shown in the following figure:   Figure 12.5.1
-Refer to Figure 12.5.1.Suppose the firm is regulated by the government that imposes marginal cost pricing.The price of a bottle of water is

Accepted Answer

A) $0. 
B) $0.50. 
C) $0.30. 
D) $0.10. 
E) $0.20. 
A) $0. 
B) $0.50. 
C) $0.30. 
D) $0.10. 
E) $0.20.

Question 4

Under a marginal cost pricing rule,a regulated natural monopoly

Accepted Answer

A) makes an economic profit and a deadweight loss arises. 
B) makes an economic profit with no deadweight loss. 
C) incurs an economic loss with no deadweight loss. 
D) incurs an economic loss and a deadweight loss arises. 
E) breaks even. 
A) makes an economic profit and a deadweight loss arises. 
B) makes an economic profit with no deadweight loss. 
C) incurs an economic loss with no deadweight loss. 
D) incurs an economic loss and a deadweight loss arises. 
E) breaks even.

Question 5

The marginal revenue curve for a single-price monopoly

Accepted Answer

A) is below its demand curve. 
B) is the same as the demand curve. 
C) lies above its demand curve. 
D) is horizontal. 
E) has a slope equal to the slope of the demand curve. 
A) is below its demand curve. 
B) is the same as the demand curve. 
C) lies above its demand curve. 
D) is horizontal. 
E) has a slope equal to the slope of the demand curve.

Question 6

In a natural monopoly,the long-run average cost curve

Accepted Answer

A) is downward sloping in the relevant range of output levels. 
B) is horizontal in the relevant range of output levels. 
C) is upward sloping in the relevant range of output levels. 
D) may be either upward sloping or downward sloping in the relevant range of output levels. 
E) lies below the marginal cost curve. 
A) is downward sloping in the relevant range of output levels. 
B) is horizontal in the relevant range of output levels. 
C) is upward sloping in the relevant range of output levels. 
D) may be either upward sloping or downward sloping in the relevant range of output levels. 
E) lies below the marginal cost curve.

Question 7

Which of the following is least likely to be a natural monopoly?

Accepted Answer

A) subway services 
B) electric utilities 
C) water and sewer services 
D) taxicab service 
E) cable television services 
A) subway services 
B) electric utilities 
C) water and sewer services 
D) taxicab service 
E) cable television services

Question 8

Use the figure below to answer the following questions.   Figure 12.4.6
-Prime Pharmaceuticals has developed a new asthma medicine,for which it has a patent.An inhaler can be produced at a constant marginal cost of $2 per inhaler.The demand curve,marginal revenue curve,and marginal cost curve for this new asthma inhaler are shown in Figure 12.4.6.The patent gives Prime Pharmaceuticals a monopoly for its new inhaler.If Prime Pharmaceuticals can perfectly price discriminate,then consumer surplus is

Accepted Answer

A) zero. 
B) $24 million. 
C) $64 million. 
D) $44 million. 
E) $32 million. 
A) zero. 
B) $24 million. 
C) $64 million. 
D) $44 million. 
E) $32 million.

Question 9

Which of the following markets will have the largest deadweight loss?

Accepted Answer

A) a single-price monopoly 
B) a perfectly competitive market 
C) a perfectly price discriminating monopoly 
D) a monopoly that discriminates among groups of buyers 
E) a monopoly that discriminates among units of a good 
A) a single-price monopoly 
B) a perfectly competitive market 
C) a perfectly price discriminating monopoly 
D) a monopoly that discriminates among groups of buyers 
E) a monopoly that discriminates among units of a good

Question 10

Use the figure below to answer the following questions.   Figure 12.3.1
-Refer to Figure 12.3.1.If this market is a single-price monopoly,then

Accepted Answer

A) it is efficient because the monopoly is maximizing economic profit. 
B) price is equal to marginal cost and the outcome is efficient. 
C) price is less than marginal cost,and consumer surplus is less than in a perfectly competitive market. 
D) price is greater than the marginal cost and the outcome is inefficient. 
E) the outcome is inefficient because the monopoly's costs are too high. 
A) it is efficient because the monopoly is maximizing economic profit. 
B) price is equal to marginal cost and the outcome is efficient. 
C) price is less than marginal cost,and consumer surplus is less than in a perfectly competitive market. 
D) price is greater than the marginal cost and the outcome is inefficient. 
E) the outcome is inefficient because the monopoly's costs are too high.

Question 11

Use the figure below to answer the following questions.   Figure 12.5.2
-Consider the natural monopoly depicted in Figure 12.5.2.What area in the graph represents the deadweight loss arising from an average cost pricing rule?

Accepted Answer

A) ABD 
B) DGF 
C) DEF 
D) ACF 
E) CBDE 
A) ABD 
B) DGF 
C) DEF 
D) ACF 
E) CBDE

Question 12

Use the table below to answer the following question.
Table 12.2.1
  
-Refer to Table 12.2.1.Minnie's Mineral Springs,a single-price monopoly,faces the market demand schedule given in the table.Minnie will not produce a quantity at which the market demand for water is inelastic because when demand is inelastic she can ________ the quantity produced,which ________.

Accepted Answer

A) increase;increases total revenue,decreases total cost,and increases economic profit 
B) increase;increases total revenue and increases total cost,but the increase in total cost is less than the increase in total revenue 
C) decrease;increases total revenue,decreases total cost,and increases economic profit 
D) decrease;decreases total revenue and decreases total cost,but the decrease in total cost is less than the decrease in total revenue 
E) decrease;increases total revenue,does not change total cost,and increases economic profit 
A) increase;increases total revenue,decreases total cost,and increases economic profit 
B) increase;increases total revenue and increases total cost,but the increase in total cost is less than the increase in total revenue 
C) decrease;increases total revenue,decreases total cost,and increases economic profit 
D) decrease;decreases total revenue and decreases total cost,but the decrease in total cost is less than the decrease in total revenue 
E) decrease;increases total revenue,does not change total cost,and increases economic profit

Question 13

Use the figure below to answer the following questions.   Figure 12.3.2
-Consider Figure 12.3.2.The light grey area shows consumer surplus,and the dark grey area shows producer surplus.Which graph illustrates a perfectly competitive market?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d) 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d)

Question 14

Use the information below to answer the following questions.
Fact 12.1.1
The following statements give some information about seven markets.
1.Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share.
2.A single firm,protected by a barrier to entry,produces a personal service that has no close substitutes.
3.A barrier to entry exists,but the good has some close substitutes.
4.A firm offers discounts to students and seniors.
5.A firm can sell any quantity it chooses at the going price.
6.The government issues Nike an exclusive licence to produce golf balls.
7.A firm experiences economies of scale even when it produces the quantity that meets the entire market demand.
-Refer to Fact 12.1.1.A monopoly might arise in the market described in

Accepted Answer

A) statements 5 and 6. 
B) statements 1 and 2. 
C) statements 2,6,and 7. 
D) statements 3 and 7. 
E) statements 4 and 7. 
A) statements 5 and 6. 
B) statements 1 and 2. 
C) statements 2,6,and 7. 
D) statements 3 and 7. 
E) statements 4 and 7.

Question 15

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 the lowest price charged for tickets?

Accepted Answer

A) $0 
B) $1.00 
C) $3.50 
D) $3.00 
E) $2.00 
A) $0 
B) $1.00 
C) $3.50 
D) $3.00 
E) $2.00

Question 16

Use the table below to answer the following questions.
Table 12.4.1  
-Table 12.4.1 shows the demand schedule faced by a perfect price-discriminating monopoly.If 3 units are sold,total revenue is

Accepted Answer

A) $15.00. 
B) $16.00. 
C) $18.00. 
D) $19.50. 
E) $5.00. 
A) $15.00. 
B) $16.00. 
C) $18.00. 
D) $19.50. 
E) $5.00.

Question 17

Use the figure below to answer the following questions.   Figure 12.5.2
-Consider the natural monopoly depicted in Figure 12.5.2.If a regulator uses a marginal cost pricing rule to set price,what is the quantity produced?

Accepted Answer

A) 0 
B) Q0 
C) Q1 
D) Q2 
E) Q3 
A) 0 
B) Q0 
C) Q1 
D) Q2 
E) Q3

Question 18

Social interest theory predicts that the political process will seek to minimize

Accepted Answer

A) producer surplus. 
B) consumer surplus. 
C) total surplus. 
D) deadweight loss. 
E) average total cost. 
A) producer surplus. 
B) consumer surplus. 
C) total surplus. 
D) deadweight loss. 
E) average total cost.

Question 19

For a single-price monopoly,the demand curve is

Accepted Answer

A) below the marginal revenue curve. 
B) the same as the marginal revenue curve. 
C) above the marginal revenue curve. 
D) the same as the total revenue curve. 
E) below the average total cost curve. 
A) below the marginal revenue curve. 
B) the same as the marginal revenue curve. 
C) above the marginal revenue curve. 
D) the same as the total revenue curve. 
E) below the average total cost curve.

Question 20

Use the figure below to answer the following questions.   Figure 12.4.5
-Which area in Figure 12.4.5 indicates the consumer surplus from a perfect price-discriminating monopoly?

Accepted Answer

A) EADH 
B) EABH 
C) ABD 
D) KEA 
E) A perfect price-discriminating monopoly does not have a consumer surplus. 
A) EADH 
B) EABH 
C) ABD 
D) KEA 
E) A perfect price-discriminating monopoly does not have a consumer surplus.

Use the figure below to answer the following questions. Figure 12.3.3 -Consider Figure 12.3.3.Which area indicates the deadweight loss from a single-price monopoly?

Use the figure below to answer the following question. Figure 12.4.3 -Refer to Figure 12.4.3.The outcome is efficient if

Under a marginal cost pricing rule,a regulated natural monopoly

The marginal revenue curve for a single-price monopoly

In a natural monopoly,the long-run average cost curve

Which of the following is least likely to be a natural monopoly?

Which of the following markets will have the largest deadweight loss?

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1.If this market is a single-price monopoly,then

Use the figure below to answer the following questions. Figure 12.5.2 -Consider the natural monopoly depicted in Figure 12.5.2.What area in the graph represents the deadweight loss arising from an average cost pricing rule?

Use the figure below to answer the following questions. Figure 12.3.2 -Consider Figure 12.3.2.The light grey area shows consumer surplus,and the dark grey area shows producer surplus.Which graph illustrates a perfectly competitive market?

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 the lowest price charged for tickets?

Use the table below to answer the following questions. Table 12.4.1 -Table 12.4.1 shows the demand schedule faced by a perfect price-discriminating monopoly.If 3 units are sold,total revenue is

Use the figure below to answer the following questions. Figure 12.5.2 -Consider the natural monopoly depicted in Figure 12.5.2.If a regulator uses a marginal cost pricing rule to set price,what is the quantity produced?

Social interest theory predicts that the political process will seek to minimize

For a single-price monopoly,the demand curve is

Use the figure below to answer the following questions. Figure 12.4.5 -Which area in Figure 12.4.5 indicates the consumer surplus from a perfect price-discriminating monopoly?

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.Which area indicates the deadweight loss from a single-price monopoly?

Use the figure below to answer the following question. Figure 12.4.3 -Refer to Figure 12.4.3.The outcome is efficient if

Under a marginal cost pricing rule,a regulated natural monopoly

The marginal revenue curve for a single-price monopoly

In a natural monopoly,the long-run average cost curve

Which of the following is least likely to be a natural monopoly?

Which of the following markets will have the largest deadweight loss?

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1.If this market is a single-price monopoly,then

Use the figure below to answer the following questions. Figure 12.5.2 -Consider the natural monopoly depicted in Figure 12.5.2.What area in the graph represents the deadweight loss arising from an average cost pricing rule?

Use the figure below to answer the following questions. Figure 12.3.2 -Consider Figure 12.3.2.The light grey area shows consumer surplus,and the dark grey area shows producer surplus.Which graph illustrates a perfectly competitive market?

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 the lowest price charged for tickets?

Use the table below to answer the following questions. Table 12.4.1 -Table 12.4.1 shows the demand schedule faced by a perfect price-discriminating monopoly.If 3 units are sold,total revenue is

Use the figure below to answer the following questions. Figure 12.5.2 -Consider the natural monopoly depicted in Figure 12.5.2.If a regulator uses a marginal cost pricing rule to set price,what is the quantity produced?

Social interest theory predicts that the political process will seek to minimize

For a single-price monopoly,the demand curve is

Use the figure below to answer the following questions. Figure 12.4.5 -Which area in Figure 12.4.5 indicates the consumer surplus from a perfect price-discriminating monopoly?

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