Question 1

A patent

Accepted Answer

A) is given only to government owned companies. 
B) is not a legal impediment to entry. 
C) is a privilege granted by a state to an inventor over his or her invention. 
D) does not give the holder a monopoly during the period it is in effect. 
A) is given only to government owned companies. 
B) is not a legal impediment to entry. 
C) is a privilege granted by a state to an inventor over his or her invention. 
D) does not give the holder a monopoly during the period it is in effect.

Question 2

Price discrimination leads to higher prices for all consumers.

Accepted Answer

A) True 
 B)False

Question 3

If a monopoly firm reduced the price of its product, which of following must have been true?

Accepted Answer

A) MR > MC 
B) MR  AR 
D) MC > AR 
A) MR > MC 
B) MR  AR 
D) MC > AR

Question 4

Since a monopolist firm will lose some customers when the price is increased, it will make every effort to keep the price as low as possible.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a barrier to entry?

Accepted Answer

A) Legal restrictions 
B) Patents 
C) Large sunk costs 
D) Survivor rights 
A) Legal restrictions 
B) Patents 
C) Large sunk costs 
D) Survivor rights

Question 6

The demand curve facing a monopolist is

Accepted Answer

A) horizontal at the market price. 
B) identical to the market demand curve for the good. 
C) exactly twice as steep as the market demand curve for the good. 
D) vertical because there are no competitors. 
A) horizontal at the market price. 
B) identical to the market demand curve for the good. 
C) exactly twice as steep as the market demand curve for the good. 
D) vertical because there are no competitors.

Question 7

The marketing division of a firm has measured demand for its product and reports that it is 2Q = 24 − P, where Q is units and P is price per unit in dollars.The cost is given in the table below.Complete the table and determine the profit-maximizing level of output for this firm.

Accepted Answer

The answer of The marketing division of a firm has...

Question 8

A monopoly firm always devotes some of its profits to research.

Accepted Answer

A) True 
 B)False

Question 9

Why does perfect competition shun advertising? Does advertising benefit a monopoly?

Accepted Answer

In perfect competition, advertising expe

Question 10

As the demand for a product falls, it is not uncommon for the industry to become a monopoly.This is most likely due to

Accepted Answer

A) an increase in the number of barriers. 
B) legal restrictions being imposed. 
C) the surviving firm operating on the declining part of its average cost curve. 
D) patent protection causing high prices. 
A) an increase in the number of barriers. 
B) legal restrictions being imposed. 
C) the surviving firm operating on the declining part of its average cost curve. 
D) patent protection causing high prices.

Question 11

Figure 11-4  
-Since the Red Cross supplies 95 percent of the blood in the United States, it can be considered a monopolist.Assume that it, in fact, operates like a monopolist.The Red Cross currently charges hospitals and other users $21 for a pint of blood.In order to increase the supply of blood, the government offers the Red Cross a $10 million, lump-sum subsidy.How much more blood supply will the subsidy generate?

Accepted Answer

A) About 500,000 pints 
B) Somewhere between 100,000 and 500,000, depending on demand elasticity 
C) Somewhere between 100,000 and 500,000, depending on the elasticity of supply 
D) Zero 
A) About 500,000 pints 
B) Somewhere between 100,000 and 500,000, depending on demand elasticity 
C) Somewhere between 100,000 and 500,000, depending on the elasticity of supply 
D) Zero

Question 12

Figure 11-7  
-The firm in Figure 11-7 is an unregulated monopolist; it will produce which of the following?

Accepted Answer

A) 175 units at a price of 7 
B) 100 units at a price of 6 
C) 100 units at a price of 9 
D) 150 units at a price of about 7.5 
A) 175 units at a price of 7 
B) 100 units at a price of 6 
C) 100 units at a price of 9 
D) 150 units at a price of about 7.5

Question 13

A monopolist firm may be more innovative than a competitive firm.

Accepted Answer

A) True 
 B)False

Question 14

The U.S.Postal Service enjoys a monopoly position because of patent rights.

Accepted Answer

A) True 
 B)False

Question 15

The U.S.government

Accepted Answer

A) intervenes to prevent the monopolization of any market. 
B) forbids the creation of legal impediments to entry into any market. 
C) intervenes to prevent the monopolization of some markets and actively encourages the monopolization of others. 
D) encourages the permanent monopolization of all markets in which the monopolist has technical superiority over potential competitors. 
A) intervenes to prevent the monopolization of any market. 
B) forbids the creation of legal impediments to entry into any market. 
C) intervenes to prevent the monopolization of some markets and actively encourages the monopolization of others. 
D) encourages the permanent monopolization of all markets in which the monopolist has technical superiority over potential competitors.

Question 16

High sunk costs in the jet aircraft market has assured Boeing of a monopoly in the production of jets for the air travel market.

Accepted Answer

A) True 
 B)False

Question 17

Successful advertising by a monopolist will

Accepted Answer

A) reduce the gap between the monopoly and competitive output. 
B) increase the gap between the monopoly and competitive output. 
C) cause the monopolist to overproduce. 
D) cause the monopolist to decrease output. 
A) reduce the gap between the monopoly and competitive output. 
B) increase the gap between the monopoly and competitive output. 
C) cause the monopolist to overproduce. 
D) cause the monopolist to decrease output.

Question 18

Owning a patent can always provide a firm with monopoly control of a market.

Accepted Answer

A) True 
 B)False

Question 19

Because a monopolist must cut its price to increase its sales by one unit,

Accepted Answer

A) MR > P at every output level. 
B) MC > MR at every output level. 
C) P > MR at every output level. 
D) MC > P at every output level. 
A) MR > P at every output level. 
B) MC > MR at every output level. 
C) P > MR at every output level. 
D) MC > P at every output level.

Question 20

Price discrimination allows a monopolist to make higher profits.

Accepted Answer

A) True 
 B)False

Exam 12: Monopoly

A patent

Price discrimination leads to higher prices for all consumers.

If a monopoly firm reduced the price of its product, which of following must have been true?

Since a monopolist firm will lose some customers when the price is increased, it will make every effort to keep the price as low as possible.

Which of the following is not a barrier to entry?

The demand curve facing a monopolist is

The marketing division of a firm has measured demand for its product and reports that it is 2Q = 24 − P, where Q is units and P is price per unit in dollars.The cost is given in the table below.Complete the table and determine the profit-maximizing level of output for this firm.

A monopoly firm always devotes some of its profits to research.

Why does perfect competition shun advertising? Does advertising benefit a monopoly?

As the demand for a product falls, it is not uncommon for the industry to become a monopoly.This is most likely due to

Figure 11-7 -The firm in Figure 11-7 is an unregulated monopolist; it will produce which of the following?

A monopolist firm may be more innovative than a competitive firm.

The U.S.Postal Service enjoys a monopoly position because of patent rights.

The U.S.government

High sunk costs in the jet aircraft market has assured Boeing of a monopoly in the production of jets for the air travel market.

Successful advertising by a monopolist will

Owning a patent can always provide a firm with monopoly control of a market.

Because a monopolist must cut its price to increase its sales by one unit,

Price discrimination allows a monopolist to make higher profits.

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

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