Question 1

Which of the following cannot be an effective entry barrier?

Accepted Answer

A)  a firm making very high economic profits 
B)  a firm being granted a patent for its product 
C)  a firm owning all of a vital resource needed to produce a good 
D)  when huge economies of scale exist 
A)  a firm making very high economic profits 
B)  a firm being granted a patent for its product 
C)  a firm owning all of a vital resource needed to produce a good 
D)  when huge economies of scale exist

Question 2

A price discriminating monopolist

Accepted Answer

A)  produces more output than that produced by a single-price monopolist. 
B)  has a lower marginal cost than that incurred by a single-price monopolist. 
C)  makes a smaller economic profit than that earned by the single-price monopolist. 
D)  makes zero economic profit in the long run. 
A)  produces more output than that produced by a single-price monopolist. 
B)  has a lower marginal cost than that incurred by a single-price monopolist. 
C)  makes a smaller economic profit than that earned by the single-price monopolist. 
D)  makes zero economic profit in the long run.

Question 3

-The table above shows the demand and costs for a single-price monopolist. The firm will

Accepted Answer

A)  maximize profit by producing 3 units. 
B)  maximize profit by producing 2 units. 
C)  operate on the inelastic portion of its demand curve. 
D)  operate on the unit elastic portion of its demand curve. 
A)  maximize profit by producing 3 units. 
B)  maximize profit by producing 2 units. 
C)  operate on the inelastic portion of its demand curve. 
D)  operate on the unit elastic portion of its demand curve.

Question 4

-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR), marginal cost (MC), and average cost (LRAC) curves. If Visual is regulated using rate of return regulation, and the regulator knows the firm's costs curves, the company will serve ________ million households and set a price of ________ per household per month.

Accepted Answer

A)  2.5; $30 
B)  3; $24 
C)  4; $12 
D)  2; $36 
A)  2.5; $30 
B)  3; $24 
C)  4; $12 
D)  2; $36

Question 5

Firms that can price discriminate between customers do so to

Accepted Answer

A)  increase consumer surplus. 
B)  increase employment. 
C)  increase their profit. 
D)  decrease the quantity they produce. 
A)  increase consumer surplus. 
B)  increase employment. 
C)  increase their profit. 
D)  decrease the quantity they produce.

Question 6

-If the firm in the figure above is unregulated, the deadweight loss will be

Accepted Answer

A)  zero. 
B)  $100. 
C)  $200. 
D)  $400. 
A)  zero. 
B)  $100. 
C)  $200. 
D)  $400.

Question 7

What is a natural monopoly and what problem does natural monopoly pose for regulators?

Accepted Answer

A natural monopoly is a firm that can su

Question 8

Which of the following is TRUE for a perfect price-discriminating monopoly?

Accepted Answer

A)  P = MR for each unit sold 
B)  P = ATC for each unit sold 
C)  P = MC for each unit sold 
D)  P > MC for each unit sold 
A)  P = MR for each unit sold 
B)  P = ATC for each unit sold 
C)  P = MC for each unit sold 
D)  P > MC for each unit sold

Question 9

The social interest theory of regulation assumes that

Accepted Answer

A)  regulations favor voters over producers. 
B)  regulations promote the attainment of competitive output. 
C)  public officials seek to keep their jobs. 
D)  public officials favor consumers over producers. 
A)  regulations favor voters over producers. 
B)  regulations promote the attainment of competitive output. 
C)  public officials seek to keep their jobs. 
D)  public officials favor consumers over producers.

Question 10

-In the above figure, if a single-price monopolist charges the profit-maximizing price, the triangle dce represents

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  deadweight loss. 
D)  marginal revenue. 
A)  consumer surplus. 
B)  producer surplus. 
C)  deadweight loss. 
D)  marginal revenue.

Question 11

In the case of a perfectly price-discriminating monopoly, there is no

Accepted Answer

A)  transfer of consumer surplus to the producer. 
B)  deadweight loss. 
C)  short-run economic profit. 
D)  long-run economic profit. 
A)  transfer of consumer surplus to the producer. 
B)  deadweight loss. 
C)  short-run economic profit. 
D)  long-run economic profit.

Question 12

For a monopolist, on the inelastic range of its demand

Accepted Answer

A)  marginal revenue is negative. 
B)  marginal revenue is positive. 
C)  marginal revenue is equal to zero. 
D)  total revenue is maximized. 
A)  marginal revenue is negative. 
B)  marginal revenue is positive. 
C)  marginal revenue is equal to zero. 
D)  total revenue is maximized.

Question 13

Activity aimed at creating artificial barriers to entry into a particular market

Accepted Answer

A)  is rent seeking. 
B)  has no social cost. 
C)  improves competition. 
D)  improves the economy's efficiency. 
A)  is rent seeking. 
B)  has no social cost. 
C)  improves competition. 
D)  improves the economy's efficiency.

Question 14

-In the figure above, what is the loss of consumer surplus if the firm is a perfectly price-discriminating monopoly instead of a perfectly competitive industry?

Accepted Answer

A)  $0 
B)  $22.50 
C)  $45.00 
D)  $90.00 
A)  $0 
B)  $22.50 
C)  $45.00 
D)  $90.00

Question 15

-Interlace, Inc. produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. When Interlace maximizes its profit, the deadweight loss is

Accepted Answer

A)  zero. 
B)  $15,000. 
C)  $21,000. 
D)  $3,000. 
A)  zero. 
B)  $15,000. 
C)  $21,000. 
D)  $3,000.

Question 16

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

Accepted Answer

A)  a marginal cost pricing rule. 
B)  an average cost pricing rule. 
C)  price discrimination. 
D)  perfect price discrimination. 
A)  a marginal cost pricing rule. 
B)  an average cost pricing rule. 
C)  price discrimination. 
D)  perfect price discrimination.

Question 17

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

Accepted Answer

A)  10 cents per cubic foot. 
B)  20 cents per cubic foot. 
C)  30 cents per cubic foot. 
D)  40 cents per cubic foot. 
A)  10 cents per cubic foot. 
B)  20 cents per cubic foot. 
C)  30 cents per cubic foot. 
D)  40 cents per cubic foot.

Question 18

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

Accepted Answer

A)  legal monopoly. 
B)  natural monopoly. 
C)  single-price monopoly. 
D)  price-discriminating monopoly. 
A)  legal monopoly. 
B)  natural monopoly. 
C)  single-price monopoly. 
D)  price-discriminating monopoly.

Question 19

Suppose a firm is a natural monopoly. Then, until the long-run average cost curve crosses the demand curve, as the quantity increases the long-run average costs

Accepted Answer

A)  increase. 
B)  decrease. 
C)  decrease and then increase. 
D)  increase and then decrease. 
A)  increase. 
B)  decrease. 
C)  decrease and then increase. 
D)  increase and then decrease.

Question 20

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

Accepted Answer

A)  $18 
B)  $4 
C)  $3 
D)  -$2 
A)  $18 
B)  $4 
C)  $3 
D)  -$2

Which of the following cannot be an effective entry barrier?

A price discriminating monopolist

-The table above shows the demand and costs for a single-price monopolist. The firm will

Firms that can price discriminate between customers do so to

-If the firm in the figure above is unregulated, the deadweight loss will be

What is a natural monopoly and what problem does natural monopoly pose for regulators?

Which of the following is TRUE for a perfect price-discriminating monopoly?

The social interest theory of regulation assumes that

-In the above figure, if a single-price monopolist charges the profit-maximizing price, the triangle dce represents

In the case of a perfectly price-discriminating monopoly, there is no

For a monopolist, on the inelastic range of its demand

Activity aimed at creating artificial barriers to entry into a particular market

-In the figure above, what is the loss of consumer surplus if the firm is a perfectly price-discriminating monopoly instead of a perfectly competitive industry?

-Interlace, Inc. produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. When Interlace maximizes its profit, the deadweight loss is

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

Suppose a firm is a natural monopoly. Then, until the long-run average cost curve crosses the demand curve, as the quantity increases the long-run average costs

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 13: Monopoly

Which of the following cannot be an effective entry barrier?

A price discriminating monopolist

-The table above shows the demand and costs for a single-price monopolist. The firm will

Firms that can price discriminate between customers do so to

-If the firm in the figure above is unregulated, the deadweight loss will be

What is a natural monopoly and what problem does natural monopoly pose for regulators?

Which of the following is TRUE for a perfect price-discriminating monopoly?

The social interest theory of regulation assumes that

-In the above figure, if a single-price monopolist charges the profit-maximizing price, the triangle dce represents

In the case of a perfectly price-discriminating monopoly, there is no

For a monopolist, on the inelastic range of its demand

Activity aimed at creating artificial barriers to entry into a particular market

-In the figure above, what is the loss of consumer surplus if the firm is a perfectly price-discriminating monopoly instead of a perfectly competitive industry?

-Interlace, Inc. produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. When Interlace maximizes its profit, the deadweight loss is

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

Suppose a firm is a natural monopoly. Then, until the long-run average cost curve crosses the demand curve, as the quantity increases the long-run average costs

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters