Question 1

Antitrust cases against ________ resulted in the firm(s) being found not guilty of unreasonable conduct under the Sherman Act.

Accepted Answer

A)  Eastman Kodak 
B)  International Harvester 
C)  United States Steel 
D)  All of the above are correct. 
A)  Eastman Kodak 
B)  International Harvester 
C)  United States Steel 
D)  All of the above are correct.

Question 2

For a monopoly, the marginal revenue curve ________ its demand curve.

Accepted Answer

A)  is below 
B)  is above 
C)  is the same as 
D)  has no relation to 
A)  is below 
B)  is above 
C)  is the same as 
D)  has no relation to

Question 3

When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. In order to sell three units of output instead of only two, the monopolist must

Accepted Answer

A)  increase its price by $30 per unit. 
B)  decrease its price by $90 per unit. 
C)  make no change in price and increase output by one unit. 
D)  decrease its price by $30 per unit. 
A)  increase its price by $30 per unit. 
B)  decrease its price by $90 per unit. 
C)  make no change in price and increase output by one unit. 
D)  decrease its price by $30 per unit.

Question 4

Refer to the information provided in Figure 13.9 below to answer the question(s) that follow.   Figure 13.9
-Refer to Figure 13.9. If Ohio Edison is forced to produce the efficient level of electricity (instead of the monopoly level),

Accepted Answer

A)  the net social gain equals area BEC. 
B)  the monopolist loses profits equal to FABE. 
C)  consumers gain consumer surplus of AFC. 
D)  the monopolist earns a profit of FGBC. 
A)  the net social gain equals area BEC. 
B)  the monopolist loses profits equal to FABE. 
C)  consumers gain consumer surplus of AFC. 
D)  the monopolist earns a profit of FGBC.

Question 5

In perfect competition, price is greater than marginal revenue while in monopoly price is less than marginal revenue.

Accepted Answer

A) True 
 B)False

Question 6

Relative to a monopolized industry, a competitively organized industry is more likely to produce

Accepted Answer

A)  more output, charge higher prices, and earn economic profits. 
B)  more output, charge lower prices, and earn economic profits. 
C)  more output, charge lower prices, and earn only a normal profit. 
D)  less output, charge higher prices, and earn economic profits. 
A)  more output, charge higher prices, and earn economic profits. 
B)  more output, charge lower prices, and earn economic profits. 
C)  more output, charge lower prices, and earn only a normal profit. 
D)  less output, charge higher prices, and earn economic profits.

Question 7

Refer to the information provided in Figure 13.4 below to answer the question(s) that follow.   Figure 13.4
-Refer to Figure 13.4. If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price, the firm's profit will be

Accepted Answer

A)  $0. 
B)  $88. 
C)  $154. 
D)  $242. 
A)  $0. 
B)  $88. 
C)  $154. 
D)  $242.

Question 8

In ________ two major antitrust cases were brought before the Supreme Court involving Standard Oil and American Tobacco.

Accepted Answer

A)  1890 
B)  1911 
C)  1945 
D)  2012 
A)  1890 
B)  1911 
C)  1945 
D)  2012

Question 9

Barriers to entry include network externalities and patents.

Accepted Answer

A) True 
 B)False

Question 10

In the United States, only the government is able to bring antitrust action against a company.

Accepted Answer

A) True 
 B)False

Question 11

Related to the Economics in Practice on page 267: When trying to determine the price of a new product, firms sometimes price the product close to the prices of similar products in the market. Firms call this approach

Accepted Answer

A)  price rationing. 
B)  focus group pricing. 
C)  test market pricing. 
D)  benchmark pricing. 
A)  price rationing. 
B)  focus group pricing. 
C)  test market pricing. 
D)  benchmark pricing.

Question 12

Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. If Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000, what is the marginal revenue of the eighteenth sound system?

Accepted Answer

A)  -$3,000 
B)  $1,000 
C)  $1,500 
D)  $3,000 
A)  -$3,000 
B)  $1,000 
C)  $1,500 
D)  $3,000

Question 13

Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. Hi Phi Unlimitedʹs total revenue from installing 20 sound systems is $30,000 and its total revenue from installing 21 sound systems is $33,800. The price of the 21st sound system is ________ the marginal revenue of that system.

Accepted Answer

A)  equal to 
B)  greater than 
C)  less than 
D)  indeterminate from the given information 
A)  equal to 
B)  greater than 
C)  less than 
D)  indeterminate from the given information

Question 14

A market where there is only one buyer for a good or service is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 15

________ are not a barrier to entry.

Accepted Answer

A)  Government franchises 
B)  Patents 
C)  Consent decrees 
D)  Economies of scale 
A)  Government franchises 
B)  Patents 
C)  Consent decrees 
D)  Economies of scale

Question 16

The ________ is(are) empowered to impose a number of ________ if it(they) find(s) that antitrust law has been violated.

Accepted Answer

A)  Antitrust Division of the Justice Department; fines 
B)  Interstate Commerce Commission; fines 
C)  courts; remedies 
D)  Federal Trade Commission; remedies 
A)  Antitrust Division of the Justice Department; fines 
B)  Interstate Commerce Commission; fines 
C)  courts; remedies 
D)  Federal Trade Commission; remedies

Question 17

Refer to the information provided in Figure 13.10 below to answer the question(s) that follow.   Figure 13.10
-Refer to Figure 13.10. For Armstrong Cable, the profit-maximizing number of subscribers is

Accepted Answer

A)  800. 
B)  1,000. 
C)  2,200. 
D)  2,500. 
A)  800. 
B)  1,000. 
C)  2,200. 
D)  2,500.

Question 18

Refer to the information provided in Figure 13.8 below to answer the question that follows.   Figure 13.8
-Refer to Figure 13.8. Each electricity producer has the given LRAC curve. The total cost of producing 100,000 kilowatts per hour is minimized with ________ firm(s) in the industry.

Accepted Answer

A)  one 
B)  ten 
C)  one hundred 
D)  Indeterminate from the given information. 
A)  one 
B)  ten 
C)  one hundred 
D)  Indeterminate from the given information.

Question 19

Patents

Accepted Answer

A)  slow the flow of benefits from research and development to consumers. 
B)  are granted for a period of 10 years in the United States. 
C)  create monopolies and are thus efficient. 
D)  All of the above are correct. 
A)  slow the flow of benefits from research and development to consumers. 
B)  are granted for a period of 10 years in the United States. 
C)  create monopolies and are thus efficient. 
D)  All of the above are correct.

Question 20

Refer to the information provided in Figure 13.9 below to answer the question(s) that follow.   Figure 13.9
-Refer to Figure 13.9. If competition is introduced into the market, the net social gain may be greater than the area BEC to the extent that

Accepted Answer

A)  the firm may have engaged in rent-seeking behavior, the cost of which would also be avoided. 
B)  society may value the increase in consumer welfare on equity as well as efficiency grounds. 
C)  firms facing competition may have a greater incentive to cut costs and innovate, which results in gains to society. 
D)  All of the above are correct. 
A)  the firm may have engaged in rent-seeking behavior, the cost of which would also be avoided. 
B)  society may value the increase in consumer welfare on equity as well as efficiency grounds. 
C)  firms facing competition may have a greater incentive to cut costs and innovate, which results in gains to society. 
D)  All of the above are correct.

Exam 13: Monopoly and Antitrust Policy

Antitrust cases against ________ resulted in the firm(s) being found not guilty of unreasonable conduct under the Sherman Act.

For a monopoly, the marginal revenue curve ________ its demand curve.

When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. In order to sell three units of output instead of only two, the monopolist must

Refer to the information provided in Figure 13.9 below to answer the question(s) that follow. Figure 13.9 -Refer to Figure 13.9. If Ohio Edison is forced to produce the efficient level of electricity (instead of the monopoly level),

In perfect competition, price is greater than marginal revenue while in monopoly price is less than marginal revenue.

Relative to a monopolized industry, a competitively organized industry is more likely to produce

Refer to the information provided in Figure 13.4 below to answer the question(s) that follow. Figure 13.4 -Refer to Figure 13.4. If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price, the firm's profit will be

In ________ two major antitrust cases were brought before the Supreme Court involving Standard Oil and American Tobacco.

Barriers to entry include network externalities and patents.

In the United States, only the government is able to bring antitrust action against a company.

Related to the Economics in Practice on page 267: When trying to determine the price of a new product, firms sometimes price the product close to the prices of similar products in the market. Firms call this approach

Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. If Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000, what is the marginal revenue of the eighteenth sound system?

A market where there is only one buyer for a good or service is called a monopoly.

________ are not a barrier to entry.

The ________ is(are) empowered to impose a number of ________ if it(they) find(s) that antitrust law has been violated.

Refer to the information provided in Figure 13.10 below to answer the question(s) that follow. Figure 13.10 -Refer to Figure 13.10. For Armstrong Cable, the profit-maximizing number of subscribers is

Refer to the information provided in Figure 13.8 below to answer the question that follows. Figure 13.8 -Refer to Figure 13.8. Each electricity producer has the given LRAC curve. The total cost of producing 100,000 kilowatts per hour is minimized with ________ firm(s) in the industry.

Patents

Refer to the information provided in Figure 13.9 below to answer the question(s) that follow. Figure 13.9 -Refer to Figure 13.9. If competition is introduced into the market, the net social gain may be greater than the area BEC to the extent that

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

The is(are) empowered to impose a number of if it(they) find(s) that antitrust law has been violated.