Question 1

If a monopoly earns a loss in the short run and market conditions do not change, then it should exit the industry in the long run.

Accepted Answer

A) True 
 B)False

Question 2

The demand for Ben & Jerry's ice cream will likely be ________ the demand for dessert.

Accepted Answer

A)  more price elastic than 
B)  less price elastic than 
C)  equally price elastic as 
D)  indeterminate from the given information 
A)  more price elastic than 
B)  less price elastic than 
C)  equally price elastic as 
D)  indeterminate from the given information

Question 3

Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?

Accepted Answer

A)  -$2,000 
B)  -$1,000 
C)  $2,000 
D)  $3,800 
A)  -$2,000 
B)  -$1,000 
C)  $2,000 
D)  $3,800

Question 4

________ is an industry market structure with many firms each able to differentiate their products.

Accepted Answer

A)  A monopoly 
B)  An oligopoly 
C)  Monopolistic competition 
D)  Perfect competition 
A)  A monopoly 
B)  An oligopoly 
C)  Monopolistic competition 
D)  Perfect competition

Question 5

In 1911, the U.S. Supreme Court made clear that the Sherman Act did not outlaw every action that seemed to restrain trade.

Accepted Answer

A) True 
 B)False

Question 6

A monopolist sets the market price for its product.

Accepted Answer

A) True 
 B)False

Question 7

The monopolist's total revenue curve is represented graphically by a positively sloped line.

Accepted Answer

A) True 
 B)False

Question 8

Patent protection in the United States is granted for 20 years from the date the patent application was filed.

Accepted Answer

A) True 
 B)False

Question 9

We know government failure as the notion that ________ becomes the tool of ________ and makes the allocation of resources even less efficient than before, and this is described in public choice theory.

Accepted Answer

A)  the public; the government 
B)  government; the rent seeker 
C)  government; barriers to entry 
D)  a natural monopoly; the government 
A)  the public; the government 
B)  government; the rent seeker 
C)  government; barriers to entry 
D)  a natural monopoly; the government

Question 10

When a monopolist sells two units of output its total revenue is $150. When a monopolist sells three units of output its total revenue, is $210. When the monopolist sells three units of output, the price per unit is

Accepted Answer

A)  $50. 
B)  $60. 
C)  $70. 
D)  $75. 
A)  $50. 
B)  $60. 
C)  $70. 
D)  $75.

Question 11

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)  all prices below $20. 
B)  prices above $10. 
C)  all prices. 
D)  prices between $4 and $8. 
A)  all prices below $20. 
B)  prices above $10. 
C)  all prices. 
D)  prices between $4 and $8.

Question 12

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. The marginal revenue of the 12th pound of burritos is

Accepted Answer

A)  -$4. 
B)  -$3. 
C)  $2. 
D)  $8. 
A)  -$4. 
B)  -$3. 
C)  $2. 
D)  $8.

Question 13

Monopoly pricing creates a social loss that is captured by no one.

Accepted Answer

A) True 
 B)False

Question 14

Relative to a profit-maximizing competitively organized industry that is producing 6,000 units of output at a price of $7 per unit, firms acting collusively under the same circumstances would produce ________ units of output and charge a price of ________ per unit.

Accepted Answer

A)  6,000; $7 
B)  more than 6,000; more than $7 
C)  less than 6,000; less than $7 
D)  less than 6,000; more than $7 
A)  6,000; $7 
B)  more than 6,000; more than $7 
C)  less than 6,000; less than $7 
D)  less than 6,000; more than $7

Question 15

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 many widgets does the monopoly supply when they act so as to maximize their profits?

Accepted Answer

A)  200 
B)  400 
C)  500 
D)  Indeterminate from the given information. 
A)  200 
B)  400 
C)  500 
D)  Indeterminate from the given information.

Question 16

A patent is a barrier to entry

Accepted Answer

A)  that allows use of an invented product or process by everyone. 
B)  that grants exclusive use of an invented product or process to the inventor. 
C)  that grants exclusive use of an invented product or process to the government. 
D)  that only allows use of an invented product or process to other companies within the industry. 
A)  that allows use of an invented product or process by everyone. 
B)  that grants exclusive use of an invented product or process to the inventor. 
C)  that grants exclusive use of an invented product or process to the government. 
D)  that only allows use of an invented product or process to other companies within the industry.

Question 17

Refer to the information provided in Figure 13.6 below to answer the question that follows.   Figure 13.6
-Refer to Figure 13.6. The Memory Company's ________ level of output is 200 high school yearbooks.

Accepted Answer

A)  break-even 
B)  profit-maximizing 
C)  loss-maximizing 
D)  shut down 
A)  break-even 
B)  profit-maximizing 
C)  loss-maximizing 
D)  shut down

Question 18

Because the marginal revenue curve for a monopolist lies below its demand curve, the profit-maximizing price of the monopolist will be above marginal cost.

Accepted Answer

A) True 
 B)False

Question 19

Public utilities are the classic examples of

Accepted Answer

A)  industries with network effects. 
B)  industries protected by patents. 
C)  natural monopolies. 
D)  industries owning a scarce factor of production. 
A)  industries with network effects. 
B)  industries protected by patents. 
C)  natural monopolies. 
D)  industries owning a scarce factor of production.

Question 20

Which of the following is not an example of price discrimination?

Accepted Answer

A)  rental car companies charging lower prices to local residents than to out-of-state residents 
B)  student discounts at museums 
C)  mattress sales on Memorial Day 
D)  children's discounts at amusement parks 
A)  rental car companies charging lower prices to local residents than to out-of-state residents 
B)  student discounts at museums 
C)  mattress sales on Memorial Day 
D)  children's discounts at amusement parks

Exam 13: Monopoly and Antitrust Policy

If a monopoly earns a loss in the short run and market conditions do not change, then it should exit the industry in the long run.

The demand for Ben & Jerry's ice cream will likely be ________ the demand for dessert.

Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?

________ is an industry market structure with many firms each able to differentiate their products.

In 1911, the U.S. Supreme Court made clear that the Sherman Act did not outlaw every action that seemed to restrain trade.

A monopolist sets the market price for its product.

The monopolist's total revenue curve is represented graphically by a positively sloped line.

Patent protection in the United States is granted for 20 years from the date the patent application was filed.

We know government failure as the notion that ________ becomes the tool of ________ and makes the allocation of resources even less efficient than before, and this is described in public choice theory.

When a monopolist sells two units of output its total revenue is $150. When a monopolist sells three units of output its total revenue, is $210. When the monopolist sells three units of output, the price per unit is

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. The marginal revenue of the 12th pound of burritos is

Monopoly pricing creates a social loss that is captured by no one.

Relative to a profit-maximizing competitively organized industry that is producing 6,000 units of output at a price of $7 per unit, firms acting collusively under the same circumstances would produce ________ units of output and charge a price of ________ per unit.

A patent is a barrier to entry

Refer to the information provided in Figure 13.6 below to answer the question that follows. Figure 13.6 -Refer to Figure 13.6. The Memory Company's ________ level of output is 200 high school yearbooks.

Because the marginal revenue curve for a monopolist lies below its demand curve, the profit-maximizing price of the monopolist will be above marginal cost.

Public utilities are the classic examples of

Which of the following is not an example of price discrimination?

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

We know government failure as the notion that becomes the tool of and makes the allocation of resources even less efficient than before, and this is described in public choice theory.

Relative to a profit-maximizing competitively organized industry that is producing 6,000 units of output at a price of $7 per unit, firms acting collusively under the same circumstances would produce units of output and charge a price of per unit.