Question 1

A 50 percent tax on the profits of a monopolist will

Accepted Answer

A) be totally shifted to the consumer. 
B) raise price and lower quantity. 
C) cause no change in profit-maximizing price and quantity. 
D) change price but not quantity. 
A) be totally shifted to the consumer. 
B) raise price and lower quantity. 
C) cause no change in profit-maximizing price and quantity. 
D) change price but not quantity.

Question 2

Figure 11-9  
-In Figure 11-9, how much more than the long-run competitive price will the profit-maximizing monopolist charge?

Accepted Answer

A) $1 
B) $2 
C) $3 
D) $11 
A) $1 
B) $2 
C) $3 
D) $11

Question 3

A monopoly restricts output and charges a higher price than other types of firms.

Accepted Answer

A) True 
 B)False

Question 4

What arguments have been advanced in defense of price discrimination?

Accepted Answer

Some would support price discrimination

Question 5

Natural monopolies are of theoretical, but not practical interest.

Accepted Answer

A) True 
 B)False

Question 6

The single source of monopolies is economies of scale.

Accepted Answer

A) True 
 B)False

Question 7

Figure 11-1  
-A monopolist is best described as a price

Accepted Answer

A) taker. 
B) searcher. 
C) maker. 
D) follower. 
A) taker. 
B) searcher. 
C) maker. 
D) follower.

Question 8

Although monopoly has lower output than competition, the level of output is efficient.

Accepted Answer

A) True 
 B)False

Question 9

A monopolist is a price maker who will lose some business if the price is increased.

Accepted Answer

A) True 
 B)False

Question 10

The U.S.Postal Service engages in price discrimination.

Accepted Answer

A) True 
 B)False

Question 11

Why is the demand curve for a monopolist downward sloping? How does this affect the monopolist's behavior?

Accepted Answer

The competitive firm faces a horizontal

Question 12

Table 11-2   ​
-In Table 11-2, average cost at the profit-maximizing output is how much?

Accepted Answer

A) $5 
B) $8 
C) $10 
D) $11 
A) $5 
B) $8 
C) $10 
D) $11

Question 13

If the government charged a tax on monopolists equal to, say, 75 percent of their economic profits, what would happen to the level of output the firm would produce? What about the price? Explain.

Accepted Answer

There would be no effect on the price or

Question 14

Figure 11-7  
-For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?

Accepted Answer

A) 100 
B) 75 
C) 50 
D) 25 
A) 100 
B) 75 
C) 50 
D) 25

Question 15

Under what circumstances would having multiple firms in a market result in higher prices for all customers?

Accepted Answer

A) Perfect competition 
B) Natural monopoly 
C) Price Discrimination 
D) Patented products 
A) Perfect competition 
B) Natural monopoly 
C) Price Discrimination 
D) Patented products

Question 16

Figure 11-5  
-In Figure 11-5, Crown Theater, a monopolist movie theater, will make a profit of ____ at its profit-maximizing price and quantity of theater tickets.

Accepted Answer

A) $450 
B) $150 
C) $300 
D) $750 
A) $450 
B) $150 
C) $300 
D) $750

Question 17

Figure 11-7  
-It is not true in the long run of monopolies that

Accepted Answer

A) other firms seeking positive economic profit enter the market. 
B) they earn positive economic profit. 
C) they sell their output at a price greater than marginal cost. 
D) they benefit from barriers to entry. 
A) other firms seeking positive economic profit enter the market. 
B) they earn positive economic profit. 
C) they sell their output at a price greater than marginal cost. 
D) they benefit from barriers to entry.

Question 18

Figure 11-5  
-What is true for both a monopolist and a perfect competitor?

Accepted Answer

A) Both maximize profits by producing where MR = MC. 
B) Both have prices that are greater than marginal revenue 
C) Both minimize average total cost. 
D) Both face downward-sloping demand curve. 
A) Both maximize profits by producing where MR = MC. 
B) Both have prices that are greater than marginal revenue 
C) Both minimize average total cost. 
D) Both face downward-sloping demand curve.

Question 19

Many public utilities are permitted to operate as monopolies because they enjoy economies of large-scale production.

Accepted Answer

A) True 
 B)False

Question 20

A monopoly firm

Accepted Answer

A) has a short-run supply curve that slopes upward. 
B) is a price taker. 
C) does not have a supply curve. 
D) is at the mercy of the market-determined price. 
A) has a short-run supply curve that slopes upward. 
B) is a price taker. 
C) does not have a supply curve. 
D) is at the mercy of the market-determined price.

Exam 12: Monopoly

A 50 percent tax on the profits of a monopolist will

Figure 11-9 -In Figure 11-9, how much more than the long-run competitive price will the profit-maximizing monopolist charge?

A monopoly restricts output and charges a higher price than other types of firms.

What arguments have been advanced in defense of price discrimination?

Natural monopolies are of theoretical, but not practical interest.

The single source of monopolies is economies of scale.

Figure 11-1 -A monopolist is best described as a price

Although monopoly has lower output than competition, the level of output is efficient.

A monopolist is a price maker who will lose some business if the price is increased.

The U.S.Postal Service engages in price discrimination.

Why is the demand curve for a monopolist downward sloping? How does this affect the monopolist's behavior?

Table 11-2 ​ -In Table 11-2, average cost at the profit-maximizing output is how much?

If the government charged a tax on monopolists equal to, say, 75 percent of their economic profits, what would happen to the level of output the firm would produce? What about the price? Explain.

Figure 11-7 -For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?

Under what circumstances would having multiple firms in a market result in higher prices for all customers?

Figure 11-5 -In Figure 11-5, Crown Theater, a monopolist movie theater, will make a profit of ____ at its profit-maximizing price and quantity of theater tickets.

Figure 11-7 -It is not true in the long run of monopolies that

Figure 11-5 -What is true for both a monopolist and a perfect competitor?

Many public utilities are permitted to operate as monopolies because they enjoy economies of large-scale production.

A monopoly firm

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

Filters

Table 11-2 -In Table 11-2, average cost at the profit-maximizing output is how much?