Question 1

The shape of a monopolist's ________ schedule is a curve bowed out from the quantity (horizontal) axis.

Accepted Answer

A)  marginal cost 
B)  total cost 
C)  marginal revenue 
D)  total revenue 
A)  marginal cost 
B)  total cost 
C)  marginal revenue 
D)  total revenue

Question 2

Refer to the information provided in Figure 13.3 below to answer the question(s) that follow.   Figure 13.3
-Refer to Figure 13.3. This firm's marginal revenue will be positive at

Accepted Answer

A)  $6. 
B)  $14. 
C)  all prices. 
D)  prices between $8 and $12. 
A)  $6. 
B)  $14. 
C)  all prices. 
D)  prices between $8 and $12.

Question 3

Refer to the information provided in Figure 13.3 below to answer the question(s) that follow.   Figure 13.3
-Refer to Figure 13.3. This firm's total revenue will be maximized at a price of

Accepted Answer

A)  $12. 
B)  $10. 
C)  $8. 
D)  $6. 
A)  $12. 
B)  $10. 
C)  $8. 
D)  $6.

Question 4

In an imperfectly competitive industry

Accepted Answer

A)  a single firm has no control over the price of its output. 
B)  a single firm has some control over the price of its output. 
C)  a single firm will be able to sell all of its output at whatever price it wants to charge. 
D)  the government will always regulate the output price. 
A)  a single firm has no control over the price of its output. 
B)  a single firm has some control over the price of its output. 
C)  a single firm will be able to sell all of its output at whatever price it wants to charge. 
D)  the government will always regulate the output price.

Question 5

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 this industry was originally perfectly competitive and becomes monopolized, the amount of ________ transferred to Ohio Edison in the form of profits is FGBE.

Accepted Answer

A)  consumer surplus 
B)  producer surplus 
C)  welfare loss 
D)  net social gain 
A)  consumer surplus 
B)  producer surplus 
C)  welfare loss 
D)  net social gain

Question 6

Firms in imperfectly competitive markets are

Accepted Answer

A)  more efficient than firms in perfectly competitive industries. 
B)  price makers. 
C)  price takers. 
D)  completely inefficient. 
A)  more efficient than firms in perfectly competitive industries. 
B)  price makers. 
C)  price takers. 
D)  completely inefficient.

Question 7

A monopolist

Accepted Answer

A)  faces the same pressures to cut costs as a competitive firm does. 
B)  must use the most efficient technology or it will be driven out of business by firms that do. 
C)  is protected from competition by barriers to entry. 
D)  faces the same pressures to innovate as a competitive firm does. 
A)  faces the same pressures to cut costs as a competitive firm does. 
B)  must use the most efficient technology or it will be driven out of business by firms that do. 
C)  is protected from competition by barriers to entry. 
D)  faces the same pressures to innovate as a competitive firm does.

Question 8

In 1911, two major antitrust cases were brought before the Supreme Court involving

Accepted Answer

A)  Eastman Kodak and Standard Oil. 
B)  American Tobacco and United States Steel. 
C)  Standard Oil and American Tobacco. 
D)  United Shoe Machinery and United States Steel. 
A)  Eastman Kodak and Standard Oil. 
B)  American Tobacco and United States Steel. 
C)  Standard Oil and American Tobacco. 
D)  United Shoe Machinery and United States Steel.

Question 9

Refer to the information provided in Figure 13.2 below to answer the question(s) that follow.   Figure 13.2
-Refer to Figure 13.2. The marginal revenue of the fifth pound of cheese is

Accepted Answer

A)  $1. 
B)  $3. 
C)  $6. 
D)  $24. 
A)  $1. 
B)  $3. 
C)  $6. 
D)  $24.

Question 10

The demand curve facing a monopolistic firm is

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical. 
A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical.

Question 11

Refer to the information provided in Figure 13.11 below to answer the question(s) that follow.   Figure 13.11
-Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. How much profit does the monopolist earn?

Accepted Answer

A)  $0 
B)  $16,000 
C)  $32,000 
D)  Indeterminate from the given information. 
A)  $0 
B)  $16,000 
C)  $32,000 
D)  Indeterminate from the given information.

Question 12

________ present(s) a barrier to entry in the DVD player market.

Accepted Answer

A)  Economies of scale 
B)  Ownership of a scarce resource 
C)  Network externalities 
D)  A government franchise 
A)  Economies of scale 
B)  Ownership of a scarce resource 
C)  Network externalities 
D)  A government franchise

Question 13

XYZ Computer Company has a monopoly on the sale of a specialized color printer. If it sells two of these printers, its total revenue is $1,000 and if it sells three, its total revenue is $1,300. The marginal revenue of the third color printer sold is

Accepted Answer

A)  $100. 
B)  $150. 
C)  $300. 
D)  $1,300. 
A)  $100. 
B)  $150. 
C)  $300. 
D)  $1,300.

Question 14

Refer to the information provided in Figure 13.2 below to answer the question(s) that follow.   Figure 13.2
-Refer to Figure 13.2. The marginal revenue of the fourth pound of cheese is

Accepted Answer

A)  $1. 
B)  $3. 
C)  $6. 
D)  $24. 
A)  $1. 
B)  $3. 
C)  $6. 
D)  $24.

Question 15

Breaking up a natural monopoly would be

Accepted Answer

A)  economically efficient. 
B)  illegal. 
C)  impossible. 
D)  inefficient. 
A)  economically efficient. 
B)  illegal. 
C)  impossible. 
D)  inefficient.

Question 16

A monopolist suffers a loss if its ________ schedule is everywhere above its ________ schedule.

Accepted Answer

A)  ATC; MC 
B)  MC; AVC 
C)  ATC; Demand 
D)  Demand; ATC 
A)  ATC; MC 
B)  MC; AVC 
C)  ATC; Demand 
D)  Demand; ATC

Question 17

The biggest problem with the Sherman Antitrust Act of 1890 was that it was unclear what

Accepted Answer

A)  "tying contracts" were. 
B)  "price discrimination" was. 
C)  specific acts were to be considered "restraints of trade." 
D)  "substantially lessen competition" meant. 
A)  "tying contracts" were. 
B)  "price discrimination" was. 
C)  specific acts were to be considered "restraints of trade." 
D)  "substantially lessen competition" meant.

Question 18

A non-discriminating monopolist's price equals its marginal revenue only when

Accepted Answer

A)  output is zero. 
B)  total revenue is a maximum. 
C)  marginal revenue is zero. 
D)  the monopolist's demand schedule intersects the horizontal (quantity) axis. 
A)  output is zero. 
B)  total revenue is a maximum. 
C)  marginal revenue is zero. 
D)  the monopolist's demand schedule intersects the horizontal (quantity) axis.

Question 19

Refer to Scenario 13.2 below to answer the question(s) that follow.
SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.
-Refer to Scenario 13.2. At what level of output (number of households) is Fun Cable Company's total revenue maximized?

Accepted Answer

A)  2,500 
B)  2,750 
C)  5,000 
D)  Indeterminate from the given information. 
A)  2,500 
B)  2,750 
C)  5,000 
D)  Indeterminate from the given information.

Question 20

Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. 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. The marginal revenue received from selling the 18th sound system is

Accepted Answer

A)  equal to the price of the 16th sound system. 
B)  greater than the price of the 16th sound system. 
C)  less than the price of the 16th sound system. 
D)  Indeterminate from the given information. 
A)  equal to the price of the 16th sound system. 
B)  greater than the price of the 16th sound system. 
C)  less than the price of the 16th sound system. 
D)  Indeterminate from the given information.

Exam 13: Monopoly and Antitrust Policy

The shape of a monopolist's ________ schedule is a curve bowed out from the quantity (horizontal) axis.

Refer to the information provided in Figure 13.3 below to answer the question(s) that follow. Figure 13.3 -Refer to Figure 13.3. This firm's marginal revenue will be positive at

Refer to the information provided in Figure 13.3 below to answer the question(s) that follow. Figure 13.3 -Refer to Figure 13.3. This firm's total revenue will be maximized at a price of

In an imperfectly competitive industry

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 this industry was originally perfectly competitive and becomes monopolized, the amount of ________ transferred to Ohio Edison in the form of profits is FGBE.

Firms in imperfectly competitive markets are

A monopolist

In 1911, two major antitrust cases were brought before the Supreme Court involving

Refer to the information provided in Figure 13.2 below to answer the question(s) that follow. Figure 13.2 -Refer to Figure 13.2. The marginal revenue of the fifth pound of cheese is

The demand curve facing a monopolistic firm is

Refer to the information provided in Figure 13.11 below to answer the question(s) that follow. Figure 13.11 -Refer to Figure 13.11. Suppose a monopolist faces the demand and costs in the figure and is able to perfectly price discriminate. How much profit does the monopolist earn?

________ present(s) a barrier to entry in the DVD player market.

XYZ Computer Company has a monopoly on the sale of a specialized color printer. If it sells two of these printers, its total revenue is $1,000 and if it sells three, its total revenue is $1,300. The marginal revenue of the third color printer sold is

Refer to the information provided in Figure 13.2 below to answer the question(s) that follow. Figure 13.2 -Refer to Figure 13.2. The marginal revenue of the fourth pound of cheese is

Breaking up a natural monopoly would be

A monopolist suffers a loss if its ________ schedule is everywhere above its ________ schedule.

The biggest problem with the Sherman Antitrust Act of 1890 was that it was unclear what

A non-discriminating monopolist's price equals its marginal revenue only when

Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. 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. The marginal revenue received from selling the 18th sound system is

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

A monopolist suffers a loss if its schedule is everywhere above its schedule.