Question 1

Microsoft's government-granted exclusive right to make and sell the Windows operating system is called a

Accepted Answer

The answer of Microsoft's government-granted exclusive right to make and...

Question 2

In order for antitrust laws to raise social welfare, the government must

Accepted Answer

A) disallow synergy benefits from accruing to monopolists. 
B) disallow any mergers from taking place. 
C) be able to determine which mergers are desirable and which are not. 
D) always attempt to keep markets in their most competitive form. 
A) disallow synergy benefits from accruing to monopolists. 
B) disallow any mergers from taking place. 
C) be able to determine which mergers are desirable and which are not. 
D) always attempt to keep markets in their most competitive form.

Question 3

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

Accepted Answer

A) True 
 B)False

Question 4

A monopolist's supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a necessary characteristic of a monopoly?

Accepted Answer

A) The firm is the sole seller of its product. 
B) The firm's product has many close substitutes. 
C) The firm generates a large economic profit. 
D) The firm is located in a small geographic market. 
A) The firm is the sole seller of its product. 
B) The firm's product has many close substitutes. 
C) The firm generates a large economic profit. 
D) The firm is located in a small geographic market.

Question 6

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) A zoo charges a lower price for a child's ticket than for an adult's ticket. 
B) A design school rebates part of the cost of tuition in the form of financial aid for underprivileged students. 
C) A local supermarket chain offers a "buy three get one free" deal. 
D) A bakery charges a higher price for brownies than for cookies. 
A) A zoo charges a lower price for a child's ticket than for an adult's ticket. 
B) A design school rebates part of the cost of tuition in the form of financial aid for underprivileged students. 
C) A local supermarket chain offers a "buy three get one free" deal. 
D) A bakery charges a higher price for brownies than for cookies.

Question 8

The fundamental source of monopoly power is

Accepted Answer

A) barriers to entry. 
B) profit. 
C) increasing average total cost. 
D) a product without close substitutes. 
A) barriers to entry. 
B) profit. 
C) increasing average total cost. 
D) a product without close substitutes.

Question 9

Figure 15-2   ​
-Refer to Figure 15-2. The demand curve for a monopoly firm is depicted by curve

Accepted Answer

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

Question 10

Reduced competition through merging of companies will raise social welfare

Accepted Answer

A) if the social cost from the synergies exceeds the benefit of increased market power. 
B) if the benefit from the synergies exceeds the social cost of increased market power. 
C) always. 
D) never. 
A) if the social cost from the synergies exceeds the benefit of increased market power. 
B) if the benefit from the synergies exceeds the social cost of increased market power. 
C) always. 
D) never.

Question 11

Figure 15-2   ​
-Refer to Figure 15-2. If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

Accepted Answer

A) remain unchanged. 
B) decrease. 
C) increase if the output is between Q3 and Q4. 
D) increase regardless of the new level of output. 
A) remain unchanged. 
B) decrease. 
C) increase if the output is between Q3 and Q4. 
D) increase regardless of the new level of output.

Question 12

The supply curve for a monopolist, in the short run, is defined in the same way as that for a competitive firm: it is the portion of the marginal cost curve above average variable cost.

Accepted Answer

A) True 
 B)False

Question 13

When a monopolist increases the amount of output that it produces and sells, average revenue

Accepted Answer

A) increases, and marginal revenue increases. 
B) increases, and marginal revenue decreases. 
C) decreases, and marginal revenue increases. 
D) decreases, and marginal revenue decreases. 
A) increases, and marginal revenue increases. 
B) increases, and marginal revenue decreases. 
C) decreases, and marginal revenue increases. 
D) decreases, and marginal revenue decreases.

Question 14

Scenario 15-1
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44.
-Refer to Scenario 15-1. At Q = 500, the firm's marginal cost is

Accepted Answer

A) less than $40. 
B) $40. 
C) $44. 
D) greater than $44. 
A) less than $40. 
B) $40. 
C) $44. 
D) greater than $44.

Question 15

The fundamental cause of monopoly is

Accepted Answer

The answer of The fundamental cause of monopoly is...

Question 16

To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where

Accepted Answer

A) MR = MC. 
B) MR intersects the demand curve. 
C) MC intersects the demand curve. 
D) MR exceeds MC by the greatest amount. 
A) MR = MC. 
B) MR intersects the demand curve. 
C) MC intersects the demand curve. 
D) MR exceeds MC by the greatest amount.

Question 17

A monopolist produces where P = MC = MR.

Accepted Answer

A) True 
 B)False

Question 18

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

Accepted Answer

The answer of Comparing firms in perfectly competitive markets to...

Question 19

A natural monopoly has economies of scale for most if not all of its range of output.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 15: Monopoly

Microsoft's government-granted exclusive right to make and sell the Windows operating system is called a

In order for antitrust laws to raise social welfare, the government must

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

A monopolist's supply curve is vertical.

Which of the following is a necessary characteristic of a monopoly?

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

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

The fundamental source of monopoly power is

Figure 15-2 ​ -Refer to Figure 15-2. The demand curve for a monopoly firm is depicted by curve

Reduced competition through merging of companies will raise social welfare

Figure 15-2 ​ -Refer to Figure 15-2. If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

The supply curve for a monopolist, in the short run, is defined in the same way as that for a competitive firm: it is the portion of the marginal cost curve above average variable cost.

When a monopolist increases the amount of output that it produces and sells, average revenue

Scenario 15-1 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44. -Refer to Scenario 15-1. At Q = 500, the firm's marginal cost is

The fundamental cause of monopoly is

To maximize total surplus with a monopoly firm, a benevolent social planner would choose the level of output where

A monopolist produces where P = MC = MR.

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

A natural monopoly has economies of scale for most if not all of its range of output.

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?

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 Nations 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 15-2 -Refer to Figure 15-2. The demand curve for a monopoly firm is depicted by curve

Figure 15-2 -Refer to Figure 15-2. If the monopoly firm is currently producing Q₄ units of output, then a decrease in output will necessarily cause profit to