Question 1

Pure monopoly markets are very common in the real world.

Accepted Answer

A) True 
 B)False

Question 2

Figure 11-3  
-In Figure 11-3, which of the following is true, whether or not the monopolist is maximizing profits?

Accepted Answer

A) MR < P. 
B) MC = P. 
C) MC < AC. 
D) MR = P. 
A) MR < P. 
B) MC = P. 
C) MC < AC. 
D) MR = P.

Question 3

When a patent expires, the firm holding the patent is able to maintain its monopoly control over the market.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) $15 
B) $7 
C) $10 
D) $11 
A) $15 
B) $7 
C) $10 
D) $11

Question 5

Figure 11-9  
-In Figure 11-9, which of the following is true?

Accepted Answer

A) MC = P. B) MC = MR. C) MU > MR. D) MU < MC. A) MC = P. B) MC = MR. C) MU > MR. D) MU < MC.

Question 6

To be a natural monopoly, a firm must

Accepted Answer

A) control an essential natural resource input. 
B) be very large. 
C) have a continuously falling average cost curve as output rises. 
D) have falling average costs over a substantial range of total market demand. 
A) control an essential natural resource input. 
B) be very large. 
C) have a continuously falling average cost curve as output rises. 
D) have falling average costs over a substantial range of total market demand.

Question 7

The demand curve facing a monopolist is

Accepted Answer

A) perfectly elastic. 
B) identical the demand curve for a perfectly competitive firm. 
C) perfectly inelastic. 
D) downward sloping. 
A) perfectly elastic. 
B) identical the demand curve for a perfectly competitive firm. 
C) perfectly inelastic. 
D) downward sloping.

Question 8

At a given output level, a monopolist earns a profit only if the

Accepted Answer

A) slope of its TR curve exceeds the slope of his or her TC curve. 
B) height of its MR curve exceeds the height of his or her MC curve. 
C) height of its demand curve exceeds the height of his or her MR curve. 
D) height of its demand curve exceeds the height of his or her ATC curve. 
A) slope of its TR curve exceeds the slope of his or her TC curve. 
B) height of its MR curve exceeds the height of his or her MC curve. 
C) height of its demand curve exceeds the height of his or her MR curve. 
D) height of its demand curve exceeds the height of his or her ATC curve.

Question 9

The marginal revenue curve for a monopolist is always below the demand curve.

Accepted Answer

A) True 
 B)False

Question 10

Since a monopolist has a unique product, it makes no sense for the firm to advertise.

Accepted Answer

A) True 
 B)False

Question 11

A similarity between monopoly and perfect competition is that both types of firms are able to earn economic profits in the short run.

Accepted Answer

A) True 
 B)False

Question 12

Explain the source of monopoly power for DeBeers' Diamond Mine in South Africa, Microsoft (owned by Bill Gates), the American Medical Association (which licenses doctors), Polaroid's Instant Picture Cameras, USAir (which owns virtually all the gates at the airport in Charlotte, North Carolina), and electric utilities.

Accepted Answer

DeBeers' controls the scarce resource by

Question 13

A natural monopoly is one that deliberately erects entry barriers.

Accepted Answer

A) True 
 B)False

Question 14

A pure monopoly is defined as having only one seller.

Accepted Answer

A) True 
 B)False

Question 15

Figure 11-5  
-In Figure 11-5, Crown Theater, a monopolist movie theater, has chosen the profit-maximizing output.At this output level, the value of MR is what value?

Accepted Answer

A) $7.50 
B) $6.00 
C) $4.50 
D) $3.00 
A) $7.50 
B) $6.00 
C) $4.50 
D) $3.00

Question 16

It is possible that if a monopoly is broken up, the cost of production for that product could increase.

Accepted Answer

A) True 
 B)False

Question 17

A major difference between a monopoly and perfect competition is that monopolies can earn an economic profit in the long run and a perfectly competitive firm cannot.

Accepted Answer

A) True 
 B)False

Question 18

Adam Smith believed that monopoly is the most efficient market structure.

Accepted Answer

A) True 
 B)False

Question 19

The ability to control a scarce resource or input is a characteristic of perfect competition.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following observations concerning price discrimination is true?

Accepted Answer

A) It only occurs in monopolies. 
B) It is easier for a monopolist than for a firm that is affected by competition. 
C) It means that sales to all customers are equally profitable. 
D) It is considered as a bad business practice under all circumstance. 
A) It only occurs in monopolies. 
B) It is easier for a monopolist than for a firm that is affected by competition. 
C) It means that sales to all customers are equally profitable. 
D) It is considered as a bad business practice under all circumstance.

Exam 12: Monopoly

Pure monopoly markets are very common in the real world.

Figure 11-3 -In Figure 11-3, which of the following is true, whether or not the monopolist is maximizing profits?

When a patent expires, the firm holding the patent is able to maintain its monopoly control over the market.

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

Figure 11-9 -In Figure 11-9, which of the following is true?

To be a natural monopoly, a firm must

The demand curve facing a monopolist is

At a given output level, a monopolist earns a profit only if the

The marginal revenue curve for a monopolist is always below the demand curve.

Since a monopolist has a unique product, it makes no sense for the firm to advertise.

A similarity between monopoly and perfect competition is that both types of firms are able to earn economic profits in the short run.

A natural monopoly is one that deliberately erects entry barriers.

A pure monopoly is defined as having only one seller.

Figure 11-5 -In Figure 11-5, Crown Theater, a monopolist movie theater, has chosen the profit-maximizing output.At this output level, the value of MR is what value?

It is possible that if a monopoly is broken up, the cost of production for that product could increase.

A major difference between a monopoly and perfect competition is that monopolies can earn an economic profit in the long run and a perfectly competitive firm cannot.

Adam Smith believed that monopoly is the most efficient market structure.

The ability to control a scarce resource or input is a characteristic of perfect competition.

Which of the following observations concerning price discrimination is true?

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, the price at the profit-maximizing output is how much?