Question 1

Figure 15-12  
-Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Accepted Answer

A) A+B 
B) C+F 
C) G 
D) A+B+C+F 
A) A+B 
B) C+F 
C) G 
D) A+B+C+F

Question 2

Which of the following is not a difference between monopolies and perfectly competitive markets?

Accepted Answer

A) Monopolies can earn profits in the long run while perfectly competitive firms break even. 
B) Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost. 
C) Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not. 
D) Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves. 
A) Monopolies can earn profits in the long run while perfectly competitive firms break even. 
B) Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost. 
C) Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not. 
D) Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.

Question 3

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws.  
-Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Accepted Answer

A) ​56 units. 
B) ​35 units. 
C) ​40 units. 
D) ​None of these, since a monopoly does not have a supply curve. 
A) ​56 units. 
B) ​35 units. 
C) ​40 units. 
D) ​None of these, since a monopoly does not have a supply curve.

Question 4

Which of the following is not one of the ways that antitrust laws promote competition?

Accepted Answer

A) Antitrust laws allow the government to prevent mergers. 
B) Antitrust laws allow the government to break up companies into smaller ones. 
C) Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive. 
D) Antitrust laws allow the government to shut down any firm the government believes has monopoly power. 
A) Antitrust laws allow the government to prevent mergers. 
B) Antitrust laws allow the government to break up companies into smaller ones. 
C) Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive. 
D) Antitrust laws allow the government to shut down any firm the government believes has monopoly power.

Question 5

Figure 15-17  
-Refer to Figure 15-17. Which of the following areas represents the profit earned by this profit-maximizing monopolist?

Accepted Answer

A) BCFE 
B) ABE 
C) EFG 
D) CFIH 
A) BCFE 
B) ABE 
C) EFG 
D) CFIH

Question 6

Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are

Accepted Answer

A) of little concern to society. 
B) a deadweight loss to society. 
C) a sunk cost to society. 
D) also observed in competitive markets. 
A) of little concern to society. 
B) a deadweight loss to society. 
C) a sunk cost to society. 
D) also observed in competitive markets.

Question 7

Which statement best describes the effect(s) that occur when a monopoly firm reduces the price of its product?

Accepted Answer

A) The "price effect" causes total revenue to fall. 
B) The "output effect" causes total revenue to rise. 
C) The "revenue effect" causes total revenue to remain constant. 
D) Both a and b are correct. 
A) The "price effect" causes total revenue to fall. 
B) The "output effect" causes total revenue to rise. 
C) The "revenue effect" causes total revenue to remain constant. 
D) Both a and b are correct.

Question 8

Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? The government could

Accepted Answer

A) regulate the monopoly. 
B) prohibited the monopoly from price discriminating. 
C) force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost. 
D) None of the above would eliminate any inefficiency associated with a monopoly. 
A) regulate the monopoly. 
B) prohibited the monopoly from price discriminating. 
C) force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost. 
D) None of the above would eliminate any inefficiency associated with a monopoly.

Question 9

Table 15-20
A monopolist faces the following demand curve:  
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to maximize profit?

Accepted Answer

A) 2 units 
B) 3 units 
C) 4 units 
D) 5 units 
A) 2 units 
B) 3 units 
C) 4 units 
D) 5 units

Question 10

Which of the following is not a reason for the existence of a monopoly?

Accepted Answer

A) patents 
B) marginal-cost pricing 
C) economies of scale 
D) trademarks 
A) patents 
B) marginal-cost pricing 
C) economies of scale 
D) trademarks

Question 11

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A) quantity supplied. 
B) supply price. 
C) deadweight loss. 
D) producer surplus. 
A) quantity supplied. 
B) supply price. 
C) deadweight loss. 
D) producer surplus.

Question 12

Exclusive ownership of a key resource

Accepted Answer

A) is the most common cause of a monopoly. 
B) is a potential but rare cause of a monopoly. 
C) explains the monopoly ownership of the US Postal Service. 
D) explains why a single firm distributes water to a community. 
A) is the most common cause of a monopoly. 
B) is a potential but rare cause of a monopoly. 
C) explains the monopoly ownership of the US Postal Service. 
D) explains why a single firm distributes water to a community.

Question 13

Which of the following is a characteristic of a monopoly?

Accepted Answer

A) rising average total costs 
B) one buyer 
C) rising fixed costs 
D) a product without close substitutes 
A) rising average total costs 
B) one buyer 
C) rising fixed costs 
D) a product without close substitutes

Question 14

With perfect price discrimination the monopoly

Accepted Answer

A) eliminates all price discrimination by charging each customer the same price. 
B) charges each customer an amount equal to the monopolist's marginal cost of production. 
C) eliminates deadweight loss. 
D) eliminates profits and increases consumer surplus. 
A) eliminates all price discrimination by charging each customer the same price. 
B) charges each customer an amount equal to the monopolist's marginal cost of production. 
C) eliminates deadweight loss. 
D) eliminates profits and increases consumer surplus.

Question 15

A monopoly firm is a price

Accepted Answer

A) taker and has no supply curve. 
B) maker and has no supply curve 
C) taker and has an upward-sloping supply curve. 
D) maker and has an upward-sloping supply curve. 
A) taker and has no supply curve. 
B) maker and has no supply curve 
C) taker and has an upward-sloping supply curve. 
D) maker and has an upward-sloping supply curve.

Question 16

When a local grocery store offers discount coupons in the Sunday paper it is most likely trying to

Accepted Answer

A) reduce prices for all customers. 
B) encourage literacy. 
C) encourage arbitrage. 
D) price discriminate. 
A) reduce prices for all customers. 
B) encourage literacy. 
C) encourage arbitrage. 
D) price discriminate.

Question 17

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.  
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie?

Accepted Answer

A) $80 
B) $100 
C) $110 
D) $120 
A) $80 
B) $100 
C) $110 
D) $120

Question 18

Figure 15-1  
-Refer to Figure 15-1. How much consumer surplus results if this single-price monopolist profit-maximizes?

Accepted Answer

The answer of Figure 15-1  
-Refer to Figure 15-1....

Question 19

Figure 15-1  
-Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Accepted Answer

A) ownership of a key resource by a single firm 
B) natural monopoly 
C) government-created monopoly 
D) a patent or copyright monopoly 
A) ownership of a key resource by a single firm 
B) natural monopoly 
C) government-created monopoly 
D) a patent or copyright monopoly

Question 20

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

A) preventing mergers through antitrust laws 
B) regulating the prices that monopolies can charge 
C) doing nothing 
D) None of the above strategies is preferred. Each is a viable strategy. 
A) preventing mergers through antitrust laws 
B) regulating the prices that monopolies can charge 
C) doing nothing 
D) None of the above strategies is preferred. Each is a viable strategy.

Exam 15: Monopoly

Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Which of the following is not a difference between monopolies and perfectly competitive markets?

​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Which of the following is not one of the ways that antitrust laws promote competition?

Figure 15-17 -Refer to Figure 15-17. Which of the following areas represents the profit earned by this profit-maximizing monopolist?

Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are

Which statement best describes the effect(s) that occur when a monopoly firm reduces the price of its product?

Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? The government could

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to maximize profit?

Which of the following is not a reason for the existence of a monopoly?

The amount that producers receive for a good minus their costs of producing it equals

Exclusive ownership of a key resource

Which of the following is a characteristic of a monopoly?

With perfect price discrimination the monopoly

A monopoly firm is a price

When a local grocery store offers discount coupons in the Sunday paper it is most likely trying to

Figure 15-1 -Refer to Figure 15-1. How much consumer surplus results if this single-price monopolist profit-maximizes?

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

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

Filters

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?