Question 1

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is correct?

Accepted Answer

A)  Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws reduce the government's power to regulate private companies. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production. 
A)  Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws reduce the government's power to regulate private companies. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.

Question 3

A monopolist produces where P > MC = MR.

Accepted Answer

A) True 
 B)False

Question 4

A market force that can prevent firms from price discriminating is

Accepted Answer

A)  fluctuating resource prices. 
B)  arbitrage. 
C)  high fixed costs. 
D)  marginal-cost pricing. 
A)  fluctuating resource prices. 
B)  arbitrage. 
C)  high fixed costs. 
D)  marginal-cost pricing.

Question 5

Table 15-11
The following table shows quantity, price, and marginal cost information for a monopoly:
  
-Refer to Table 15-11.What price should the firm charge to maximize its profit?

Accepted Answer

A)  $4 
B)  $5 
C)  $6 
D)  $7 
A)  $4 
B)  $5 
C)  $6 
D)  $7

Question 6

Antitrust laws allow the government to

Accepted Answer

A)  prevent mergers. 
B)  break up companies. 
C)  promote competition. 
D)  All of the above are correct. 
A)  prevent mergers. 
B)  break up companies. 
C)  promote competition. 
D)  All of the above are correct.

Question 7

For a monopoly,marginal revenue is often greater than the price it charges for its good.

Accepted Answer

A) True 
 B)False

Question 8

One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

Accepted Answer

A)  marginal cost equals price, while a monopolist produces where price exceeds marginal cost. 
B)  marginal cost equals price, while a monopolist produces where marginal cost exceeds price. 
C)  price exceeds marginal cost, while a monopolist produces where marginal cost equals price. 
D)  marginal cost exceeds price, while a monopolist produces where marginal cost equals price. 
A)  marginal cost equals price, while a monopolist produces where price exceeds marginal cost. 
B)  marginal cost equals price, while a monopolist produces where marginal cost exceeds price. 
C)  price exceeds marginal cost, while a monopolist produces where marginal cost equals price. 
D)  marginal cost exceeds price, while a monopolist produces where marginal cost equals price.

Question 9

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Accepted Answer

A)  A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost. 
B)  A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost. 
C)  For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output. 
D)  For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit-maximizing monopolist. 
A)  A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost. 
B)  A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost. 
C)  For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output. 
D)  For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit-maximizing monopolist.

Question 10

Table 15-6
A monopolist faces the following demand curve:
  
-Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

Accepted Answer

A)  $1 
B)  $3 
C)  $8 
D)  $15 
A)  $1 
B)  $3 
C)  $8 
D)  $15

Question 11

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus. 
A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus.

Question 12

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Accepted Answer

The defining characteristic of

Question 13

Goods that do not have close substitutes have downward-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 14

Table 15-18
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
  
-Refer to Table 15-18.If the monopolist can engage in perfect price discrimination,what is the marginal revenue from selling the 8th tie?

Accepted Answer

A)  $45 
B)  $60 
C)  $80 
D)  $95 
A)  $45 
B)  $60 
C)  $80 
D)  $95

Question 15

Which of the following is not one of the ways that antitrust laws promote competition?

Accepted Answer

A)  Antitrust laws allow the government to prevent mergers. 
B)  Antitrust laws allow the government to break up companies into smaller ones. 
C)  Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive. 
D)  Antitrust laws allow the government to shut down any firm the government believes has monopoly power. 
A)  Antitrust laws allow the government to prevent mergers. 
B)  Antitrust laws allow the government to break up companies into smaller ones. 
C)  Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive. 
D)  Antitrust laws allow the government to shut down any firm the government believes has monopoly power.

Question 16

Which of the following is an example of a barrier to entry?

Accepted Answer

A)  Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup. 
B)  Mark charges a lower price to students than to faculty for his tattoo services. 
C)  Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring. 
D)  John obtained a copyright for the song he wrote and recorded. 
A)  Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup. 
B)  Mark charges a lower price to students than to faculty for his tattoo services. 
C)  Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring. 
D)  John obtained a copyright for the song he wrote and recorded.

Question 17

Which of the following statements is true?
(i)When a competitive firm sells an additional unit of output,its revenue increases by an amount less than the price.
(ii)When a monopoly firm sells an additional unit of output,its revenue increases by an amount less than the price.
(iii)Average revenue is the same as price for both competitive and monopoly firms.

Accepted Answer

A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only 
A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only

Question 18

When a monopoly increases its output and sales,

Accepted Answer

A)  both the output effect and the price effect work to increase total revenue. 
B)  the output effect works to increase total revenue, and the price effect works to decrease total revenue. 
C)  the output effect works to decrease total revenue, and the price effect works to increase total revenue. 
D)  both the output effect and the price effect work to decrease total revenue. 
A)  both the output effect and the price effect work to increase total revenue. 
B)  the output effect works to increase total revenue, and the price effect works to decrease total revenue. 
C)  the output effect works to decrease total revenue, and the price effect works to increase total revenue. 
D)  both the output effect and the price effect work to decrease total revenue.

Question 19

Which of the following statements is correct?

Accepted Answer

A)  Firms with some degree of monopoly power are common, but firms with substantial monopoly power are rare. 
B)  Firms with some degree of monopoly power are rare, as are firms with substantial monopoly power. 
C)  Firms with some degree of monopoly power are common, as are firms with substantial monopoly power. 
D)  Firms with some degree of monopoly power are rare, but firms with substantial monopoly power are common. 
A)  Firms with some degree of monopoly power are common, but firms with substantial monopoly power are rare. 
B)  Firms with some degree of monopoly power are rare, as are firms with substantial monopoly power. 
C)  Firms with some degree of monopoly power are common, as are firms with substantial monopoly power. 
D)  Firms with some degree of monopoly power are rare, but firms with substantial monopoly power are common.

Question 20

A monopolist faces the following demand curve:  
The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

Accepted Answer

A)  400 
B)  500 
C)  900 
D)  4,200 
A)  400 
B)  500 
C)  900 
D)  4,200

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Which of the following statements is correct?

A monopolist produces where P > MC = MR.

A market force that can prevent firms from price discriminating is

Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What price should the firm charge to maximize its profit?

Antitrust laws allow the government to

For a monopoly,marginal revenue is often greater than the price it charges for its good.

One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

The amount that producers receive for a good minus their costs of producing it equals

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Goods that do not have close substitutes have downward-sloping demand curves.

Which of the following is not one of the ways that antitrust laws promote competition?

Which of the following is an example of a barrier to entry?

When a monopoly increases its output and sales,

Which of the following statements is correct?

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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Exam 15: Monopoly.

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Which of the following statements is correct?

A monopolist produces where P > MC = MR.

A market force that can prevent firms from price discriminating is

Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What price should the firm charge to maximize its profit?

Antitrust laws allow the government to

For a monopoly,marginal revenue is often greater than the price it charges for its good.

One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

The amount that producers receive for a good minus their costs of producing it equals

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Goods that do not have close substitutes have downward-sloping demand curves.

Which of the following is not one of the ways that antitrust laws promote competition?

Which of the following is an example of a barrier to entry?

When a monopoly increases its output and sales,

Which of the following statements is correct?

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters