Question 1

The distribution of water to residents of a town and an infrequently used bridge are examples of

Accepted Answer

The answer of The distribution of water to residents of...

Question 2

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Accepted Answer

A) offset by regulatory revenues. 
B) called a deadweight loss. 
C) equal to the monopolist's profit. 
D) Both b and c are correct. 
A) offset by regulatory revenues. 
B) called a deadweight loss. 
C) equal to the monopolist's profit. 
D) Both b and c are correct.

Question 3

In a market characterized by monopoly, the market demand curve is

Accepted Answer

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

Question 4

Which of the following is not an example of a barrier to entry?

Accepted Answer

A) John owns the only parcel of lakeside property with a beach that is safe for swimming. He charges admission to neighbors who want to use the beach. 
B) Jackie owns the copyright to a popular song. She receives royalties every time a radio station plays her song. 
C) John Jr. owns the best seafood restaurant in a popular resort area. He charges high prices because the quality of the food is so good. 
D) Caroline owns the patent for a new running shoe. She receives payments from the company who manufactures the shoes. 
A) John owns the only parcel of lakeside property with a beach that is safe for swimming. He charges admission to neighbors who want to use the beach. 
B) Jackie owns the copyright to a popular song. She receives royalties every time a radio station plays her song. 
C) John Jr. owns the best seafood restaurant in a popular resort area. He charges high prices because the quality of the food is so good. 
D) Caroline owns the patent for a new running shoe. She receives payments from the company who manufactures the shoes.

Question 5

Table 15-6
A monopolist faces the following demand curve:  
-Refer to Table 15-6. What is the marginal revenue from the sale of the 3rd unit?

Accepted Answer

A) -$3 
B) $3 
C) $9 
D) $24 
A) -$3 
B) $3 
C) $9 
D) $24

Question 6

Table 15-9
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A) $4 
B) $14 
C) $31 
D) $62 
A) $4 
B) $14 
C) $31 
D) $62

Question 7

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

Accepted Answer

A) adults buy more popcorn than children. 
B) the cost of showing a movie to children is less than the cost of showing a movie to adults. 
C) it has some degree of monopoly-pricing power. 
D) All of the above are correct. 
A) adults buy more popcorn than children. 
B) the cost of showing a movie to children is less than the cost of showing a movie to adults. 
C) it has some degree of monopoly-pricing power. 
D) All of the above are correct.

Question 8

Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of

Accepted Answer

A) consumer surplus. 
B) deadweight loss. 
C) price discrimination. 
D) nonprofit pricing strategies. 
A) consumer surplus. 
B) deadweight loss. 
C) price discrimination. 
D) nonprofit pricing strategies.

Question 9

A monopolist faces the following demand curve:   The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Accepted Answer

A) 400 
B) 500 
C) 900 
D) 4,200 
A) 400 
B) 500 
C) 900 
D) 4,200

Question 10

Figure 15-4  
-Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 11

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to

Accepted Answer

A) $3. 
B) $4. 
C) $24. 
D) -$4. 
A) $3. 
B) $4. 
C) $24. 
D) -$4.

Question 12

Scenario 15-1
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is:
Passenger Type
Willingness to Pay
Demand per day
Adults
$18
70
Children
$10
25
Senior Citizens
$12
55
Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18?

Accepted Answer

The answer of Scenario 15-1
Vincent operates a scenic tour business...

Question 13

Because a monopolist does not face competition from other firms, the outcome in a market with a monopoly

Accepted Answer

A) does not illustrate profit maximization. 
B) is often not in the best interest of society. 
C) is characterized by unlimited profits. 
D) would be improved if the government produced the product rather than a private firm. 
A) does not illustrate profit maximization. 
B) is often not in the best interest of society. 
C) is characterized by unlimited profits. 
D) would be improved if the government produced the product rather than a private firm.

Question 14

A monopolist's profits with price discrimination will be

Accepted Answer

A) lower than if the firm charged a single, profit-maximizing price 
B) the same as if the firm charged a single, profit-maximizing price. 
C) higher than if the firm charged just one price because the firm will capture more consumer surplus. 
D) higher than if the firm charged a single price because the costs of selling the good will be lower. 
A) lower than if the firm charged a single, profit-maximizing price 
B) the same as if the firm charged a single, profit-maximizing price. 
C) higher than if the firm charged just one price because the firm will capture more consumer surplus. 
D) higher than if the firm charged a single price because the costs of selling the good will be lower.

Question 15

Generic drugs enter the pharmaceutical drug market once

Accepted Answer

A) the ingredients to the name brand drug have been discovered. 
B) 10 years have passed. 
C) they are patented. 
D) the patent on the name brand drug expires. 
A) the ingredients to the name brand drug have been discovered. 
B) 10 years have passed. 
C) they are patented. 
D) the patent on the name brand drug expires.

Question 16

Table 15-9
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-9. What is the monopolist's average total cost of production at the profit-maximizing price?

Accepted Answer

A) $12 
B) $14 
C) $16 
D) $17 
A) $12 
B) $14 
C) $16 
D) $17

Question 17

For a monopolist,

Accepted Answer

A) average revenue is always greater than the price of the good. 
B) marginal revenue is always less than the price of the good. 
C) marginal cost is always greater than average total cost. 
D) marginal revenue equals marginal cost at the point where total revenue is maximized. 
A) average revenue is always greater than the price of the good. 
B) marginal revenue is always less than the price of the good. 
C) marginal cost is always greater than average total cost. 
D) marginal revenue equals marginal cost at the point where total revenue is maximized.

Question 18

Figure 15-2  
-Refer to Figure 15-2. Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Accepted Answer

A) monopoly resources 
B) government regulation 
C) the production process 
D) Both a and b are correct. 
A) monopoly resources 
B) government regulation 
C) the production process 
D) Both a and b are correct.

Question 19

Which of the following would be most likely to have monopoly power?

Accepted Answer

A) a national florist 
B) an online bookstore 
C) a local restaurant 
D) a local electrical cooperative 
A) a national florist 
B) an online bookstore 
C) a local restaurant 
D) a local electrical cooperative

Question 20

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A) $22. 
B) $27. 
C) $54. 
D) $108. 
A) $22. 
B) $27. 
C) $54. 
D) $108.

Exam 15: Monopoly

The distribution of water to residents of a town and an infrequently used bridge are examples of

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

In a market characterized by monopoly, the market demand curve is

Which of the following is not an example of a barrier to entry?

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. What is the marginal revenue from the sale of the 3rd unit?

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Figure 15-4 -Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to

Because a monopolist does not face competition from other firms, the outcome in a market with a monopoly

A monopolist's profits with price discrimination will be

Generic drugs enter the pharmaceutical drug market once

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the monopolist's average total cost of production at the profit-maximizing price?

For a monopolist,

Figure 15-2 -Refer to Figure 15-2. Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Which of the following would be most likely to have monopoly power?

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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