Question 1

Exhibit 23-2
  
-Refer to Exhibit 23-2. Total cost at the profit-maximizing quantity of output is the

Accepted Answer

A) area 0P2CQ0. 
B) area 0P3FQ0. 
C) area 0P1BQ0. 
D) distance from Q0 to D. 
E) none of the above 
A) area 0P2CQ0. 
B) area 0P3FQ0. 
C) area 0P1BQ0. 
D) distance from Q0 to D. 
E) none of the above

Question 2

A seller that has the ability (to some degree) to control the price of the product it sells is called a price

Accepted Answer

A) taker. 
B) searcher. 
C) breaker. 
D) twister. 
A) taker. 
B) searcher. 
C) breaker. 
D) twister.

Question 3

Exhibit 23-7
  
-Refer to Exhibit 23-7. Let D be the demand curve facing a perfectly price-discriminating monopolist. The marginal revenue it receives from selling the 150th unit of good X sold equals

Accepted Answer

A) $60. 
B) $45. 
C) $30. 
D) $0, since it sells less than 150 units. 
A) $60. 
B) $45. 
C) $30. 
D) $0, since it sells less than 150 units.

Question 4

Exhibit 23-7
  
-Refer to Exhibit 23-7. The total revenue collected by a profit-maximizing single-price monopolist is

Accepted Answer

A) $4,500. 
B) $2,250. 
C) $6,750. 
D) $9,000. 
A) $4,500. 
B) $2,250. 
C) $6,750. 
D) $9,000.

Question 5

If the monopoly firm's marginal cost curve is either horizontal or upward sloping, it follows that its marginal revenue curve will cut its marginal cost curve at a __________ level of output than where its demand curve cuts its marginal cost curve. It also follows that if the firm were to produce the quantity of output consistent with where its demand curve cut its marginal cost curve, the firm would be __________.

Accepted Answer

A) lower; earning profits 
B) lower; resource-allocative efficient 
C) higher; productive efficient 
D) lower; minimizing costs 
E) none of the above 
A) lower; earning profits 
B) lower; resource-allocative efficient 
C) higher; productive efficient 
D) lower; minimizing costs 
E) none of the above

Question 6

Exhibit 23-1
  
-Refer to Exhibit 23-1. If the product is produced under single-price monopoly, what do profits equal at the profit maximizing level of output?

Accepted Answer

A) area 0P1BQ1 
B) area BCA 
C) area P1P2CB 
D) area P2CAP1 
E) none of the above 
A) area 0P1BQ1 
B) area BCA 
C) area P1P2CB 
D) area P2CAP1 
E) none of the above

Question 7

Competition is legally prohibited when barriers to entry take the form of

Accepted Answer

A) public franchises. 
B) economies of scale. 
C) exclusive ownership of a resource. 
D) all of the above 
E) none of the above 
A) public franchises. 
B) economies of scale. 
C) exclusive ownership of a resource. 
D) all of the above 
E) none of the above

Question 8

Exhibit 23-8
   ​
​
-Refer to Exhibit 23-8. The marginal cost of the last unit produced at the profit-maximizing output level equals

Accepted Answer

A) $20. 
B) $50. 
C) $40. 
D) $70. 
E) $54. 
A) $20. 
B) $50. 
C) $40. 
D) $70. 
E) $54.

Question 9

If a monopolist practices perfect price discrimination, then it will have

Accepted Answer

A) a greater total revenue and sell a greater output than if it were not practicing price discrimination. 
B) a smaller total revenue and sell a smaller output than if it were not practicing price discrimination. 
C) the same total revenue but sell a larger output than if it were not practicing price discrimination. 
D) the same total revenue but sell a smaller output than if it were not practicing price discrimination. 
A) a greater total revenue and sell a greater output than if it were not practicing price discrimination. 
B) a smaller total revenue and sell a smaller output than if it were not practicing price discrimination. 
C) the same total revenue but sell a larger output than if it were not practicing price discrimination. 
D) the same total revenue but sell a smaller output than if it were not practicing price discrimination.

Question 10

When a monopolist can perfectly price discriminate, it follows that

Accepted Answer

A) price equals marginal revenue. 
B) price equals marginal cost at the quantity of output it chooses to produce. 
C) the monopolist is resource-allocative efficient. 
D) b and c 
E) a, b, and c 
A) price equals marginal revenue. 
B) price equals marginal cost at the quantity of output it chooses to produce. 
C) the monopolist is resource-allocative efficient. 
D) b and c 
E) a, b, and c

Question 11

A monopolist can sell 26,000 units at a price of $30 per unit. Lowering price by $1 raises the quantity demanded by 1,000 units. What is the change in total revenue resulting from this price change?

Accepted Answer

A) $1,500 
B) $3,000 
C) $5,500 
D) -$2,800 
A) $1,500 
B) $3,000 
C) $5,500 
D) -$2,800

Question 12

Exhibit 23-7
  
-Refer to Exhibit 23-7. The maximum profits earned by a single-price monopolist producing good X are

Accepted Answer

A) $9,000. 
B) $4,500. 
C) $2,250. 
D) $1,125. 
A) $9,000. 
B) $4,500. 
C) $2,250. 
D) $1,125.

Question 13

Buying low and selling high is often referred to as

Accepted Answer

A) price discrimination. 
B) rent-seeking. 
C) arbitrage. 
D) scarcity. 
E) capitalization. 
A) price discrimination. 
B) rent-seeking. 
C) arbitrage. 
D) scarcity. 
E) capitalization.

Question 14

Exhibit 23-6
  
-Refer to Exhibit 23-6. Let C be the demand curve facing a perfectly price-discriminating monopolist and P0 the price it charges for the last unit of X it sells. The marginal cost of the last unit

Accepted Answer

A) is less than P0. 
B) equals P0. 
C) is greater than P0. 
D) could be any of the above, depending on the shape of the marginal cost curve. 
A) is less than P0. 
B) equals P0. 
C) is greater than P0. 
D) could be any of the above, depending on the shape of the marginal cost curve.

Question 15

Suppose that your school pays one rate for the first one million kilowatts of electricity and a lower rate for any power it uses over one million kilowatts. What economic concept is occurring here?

Accepted Answer

A) perfect price discrimination 
B) second-degree price discrimination 
C) third-degree price discrimination 
D) economies of scale 
A) perfect price discrimination 
B) second-degree price discrimination 
C) third-degree price discrimination 
D) economies of scale

Question 16

Exhibit 23-3
  
-Refer to Exhibit 23-3. The level of output the profit-maximizing perfectly price-discriminating monopolist produces is

Accepted Answer

A) q1. 
B) q2. 
C) q3. 
D) q4. 
A) q1. 
B) q2. 
C) q3. 
D) q4.

Question 17

Exhibit 23-10
  
-Refer to Exhibit 23-10. The profit-maximizing single-price monopolist earns profits equal to what area?

Accepted Answer

A) ABGH 
B) HGCD 
C) DCE 
D) ABCD 
E) GFC 
A) ABGH 
B) HGCD 
C) DCE 
D) ABCD 
E) GFC

Question 18

Describe the circumstance under which profit maximization is the same as revenue maximization. Use a hypothetical numerical example to help explain why this is so.

Accepted Answer

In the unlikely event that a firm has no

Question 19

Suppose the local pharmacy charges lower prices to senior citizens than it charges to younger customers. The pharmacy is practicing

Accepted Answer

A) perfect price discrimination. 
B) second-degree price discrimination. 
C) arbitrage. 
D) third-degree price discrimination. 
E) non-cost discrimination. 
A) perfect price discrimination. 
B) second-degree price discrimination. 
C) arbitrage. 
D) third-degree price discrimination. 
E) non-cost discrimination.

Question 20

If a perfectly competitive firm and a single-price monopolist face the same demand and cost curves, then the competitive firm will produce a

Accepted Answer

A) greater output and charge a lower price than the monopolist. 
B) greater output but charge the same price as the monopolist. 
C) greater output and charge a higher price than the monopolist. 
D) smaller output and charge a lower price than the monopolist. 
E) smaller output and charge a higher price than the monopolist. 
A) greater output and charge a lower price than the monopolist. 
B) greater output but charge the same price as the monopolist. 
C) greater output and charge a higher price than the monopolist. 
D) smaller output and charge a lower price than the monopolist. 
E) smaller output and charge a higher price than the monopolist.

Exam 23: Monopoly

Exhibit 23-2 -Refer to Exhibit 23-2. Total cost at the profit-maximizing quantity of output is the

A seller that has the ability (to some degree) to control the price of the product it sells is called a price

Exhibit 23-7 -Refer to Exhibit 23-7. Let D be the demand curve facing a perfectly price-discriminating monopolist. The marginal revenue it receives from selling the 150th unit of good X sold equals

Exhibit 23-7 -Refer to Exhibit 23-7. The total revenue collected by a profit-maximizing single-price monopolist is

Exhibit 23-1 -Refer to Exhibit 23-1. If the product is produced under single-price monopoly, what do profits equal at the profit maximizing level of output?

Competition is legally prohibited when barriers to entry take the form of

Exhibit 23-8 ​ ​ -Refer to Exhibit 23-8. The marginal cost of the last unit produced at the profit-maximizing output level equals

If a monopolist practices perfect price discrimination, then it will have

When a monopolist can perfectly price discriminate, it follows that

A monopolist can sell 26,000 units at a price of $30 per unit. Lowering price by $1 raises the quantity demanded by 1,000 units. What is the change in total revenue resulting from this price change?

Exhibit 23-7 -Refer to Exhibit 23-7. The maximum profits earned by a single-price monopolist producing good X are

Buying low and selling high is often referred to as

Exhibit 23-6 -Refer to Exhibit 23-6. Let C be the demand curve facing a perfectly price-discriminating monopolist and P0 the price it charges for the last unit of X it sells. The marginal cost of the last unit

Suppose that your school pays one rate for the first one million kilowatts of electricity and a lower rate for any power it uses over one million kilowatts. What economic concept is occurring here?

Exhibit 23-3 -Refer to Exhibit 23-3. The level of output the profit-maximizing perfectly price-discriminating monopolist produces is

Exhibit 23-10 -Refer to Exhibit 23-10. The profit-maximizing single-price monopolist earns profits equal to what area?

Describe the circumstance under which profit maximization is the same as revenue maximization. Use a hypothetical numerical example to help explain why this is so.

Suppose the local pharmacy charges lower prices to senior citizens than it charges to younger customers. The pharmacy is practicing

If a perfectly competitive firm and a single-price monopolist face the same demand and cost curves, then the competitive firm will produce a

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 23-8 -Refer to Exhibit 23-8. The marginal cost of the last unit produced at the profit-maximizing output level equals

Exhibit 23-6 -Refer to Exhibit 23-6. Let C be the demand curve facing a perfectly price-discriminating monopolist and P₀ the price it charges for the last unit of X it sells. The marginal cost of the last unit