Question 1

A monopolist will maximize profits by

Accepted Answer

A)  setting the price at the level that will maximize per-unit profit. 
B)  producing the output where marginal revenue equals total cost and charging a price along the demand curve. 
C)  selling at the price on the demand curve at the output rate where marginal revenue equals marginal cost. 
D)  producing at the output rate where price equals marginal cost. 
A)  setting the price at the level that will maximize per-unit profit. 
B)  producing the output where marginal revenue equals total cost and charging a price along the demand curve. 
C)  selling at the price on the demand curve at the output rate where marginal revenue equals marginal cost. 
D)  producing at the output rate where price equals marginal cost.

Question 2

Use the figure to answer the following question(s).
Figure 11-8
 
The demand and cost conditions in an industry are as depicted in Figure 11-8. In the viewpoint of economic efficiency, what would the ideal price and output be?

Accepted Answer

A)  price, $10; quantity produced, 100 
B)  price, $15; quantity produced, 50 
C)  price, $15; quantity produced, 75 
D)  price, $20; quantity produced, 50 
A)  price, $10; quantity produced, 100 
B)  price, $15; quantity produced, 50 
C)  price, $15; quantity produced, 75 
D)  price, $20; quantity produced, 50

Question 3

Which of the following best fits the definition of a monopoly?

Accepted Answer

A)  the local cable company 
B)  IBM, the world's largest manufacturer of certain types of computers 
C)  Panasonic, the only company that sells Technics brand of stereos 
D)  General Motors 
A)  the local cable company 
B)  IBM, the world's largest manufacturer of certain types of computers 
C)  Panasonic, the only company that sells Technics brand of stereos 
D)  General Motors

Question 4

Use the figure to answer the following question(s).
Figure 11-12
 
Figure 11-12 indicates the industry cost and demand conditions for a product produced in an oligopolistic industry. The price of this product is most likely to be

Accepted Answer

A)  greater than P 2. 
B)  P 2. 
C)  P 1. 
D)  in the range between P 1 and P 2. 
A)  greater than P 2. 
B)  P 2. 
C)  P 1. 
D)  in the range between P 1 and P 2.

Question 5

The figure below illustrates the cost and revenue structure for a monopoly firm.
Figure 11-17
 
Refer to Figure 11-17. The demand curve for a monopoly firm is depicted by curve

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 6

Use the figure to answer the following question(s).
Figure 11-2
 
What is the maximum profit per month that the monopolist will be able to earn in Figure 11-2?

Accepted Answer

A)  zero 
B)  approximately $10,000 
C)  approximately $20,000 
D)  approximately $40,000 
A)  zero 
B)  approximately $10,000 
C)  approximately $20,000 
D)  approximately $40,000

Question 7

Figure 11-20  
At the profit-maximizing level of production, the monopoly in Figure 11-20 will have total revenue of

Accepted Answer

A)  $308 
B)  $187 
C)  $216 
D)  $306 
E)  $272 
A)  $308 
B)  $187 
C)  $216 
D)  $306 
E)  $272

Question 8

As a group, oligopolists would always earn the highest profit if they would

Accepted Answer

A)  produce the competitive quantity of output. 
B)  produce more than the competitive quantity of output. 
C)  charge the same price that a monopolist would charge if the market were a monopoly. 
D)  operate according to their own individual self-interests. 
A)  produce the competitive quantity of output. 
B)  produce more than the competitive quantity of output. 
C)  charge the same price that a monopolist would charge if the market were a monopoly. 
D)  operate according to their own individual self-interests.

Question 9

Empirical studies show that the after-tax accounting profits of manufacturing corporations are approximately what percent of sales?

Accepted Answer

A)  1 percent 
B)  5 percent 
C)  15 percent 
D)  25 to 30 percent 
A)  1 percent 
B)  5 percent 
C)  15 percent 
D)  25 to 30 percent

Question 10

Which of the following will reduce the likelihood of effective collusion among oligopolistic producers?

Accepted Answer

A)  low entry barriers into the market 
B)  a production of a homogenous product 
C)  a stable market demand for the product 
D)  a highly inelastic market demand for the product 
A)  low entry barriers into the market 
B)  a production of a homogenous product 
C)  a stable market demand for the product 
D)  a highly inelastic market demand for the product

Question 11

Which of the following constitutes a barrier limiting the entry of potential competitors into a market?

Accepted Answer

A)  diseconomies of scale 
B)  an elastic market demand for the product produced by the industry 
C)  control over an essential resource 
D)  a perfectly elastic demand curve 
A)  diseconomies of scale 
B)  an elastic market demand for the product produced by the industry 
C)  control over an essential resource 
D)  a perfectly elastic demand curve

Question 12

Which of the following will be an obstacle to oligopolistic collusion in a market?

Accepted Answer

A)  government regulations restricting entry 
B)  a relatively small number of oligopolistic firms 
C)  unstable demand conditions 
D)  uniform products 
A)  government regulations restricting entry 
B)  a relatively small number of oligopolistic firms 
C)  unstable demand conditions 
D)  uniform products

Question 13

Government-operated firms with monopoly power

Accepted Answer

A)  will necessarily meet the criteria of economic efficiency, as long as price equals average total cost. 
B)  will always be more efficient than private firms because they do not have to make a profit. 
C)  are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees. 
D)  are highly responsive to changes in the preferences of individual consumers since consumers are also voters. 
A)  will necessarily meet the criteria of economic efficiency, as long as price equals average total cost. 
B)  will always be more efficient than private firms because they do not have to make a profit. 
C)  are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees. 
D)  are highly responsive to changes in the preferences of individual consumers since consumers are also voters.

Question 14

The prisoners' dilemma is used to illustrate the basic idea that

Accepted Answer

A)  oligopolistic firms would be better off if they collude, but each has an incentive to cheat on the collusive agreement. 
B)  oligopolistic firms are always worse off when they collude. 
C)  oligopolistic firms never have an incentive to cheat on collusive agreements, unlike prisoners. 
D)  students who cheat on economics exams end up in jail. 
A)  oligopolistic firms would be better off if they collude, but each has an incentive to cheat on the collusive agreement. 
B)  oligopolistic firms are always worse off when they collude. 
C)  oligopolistic firms never have an incentive to cheat on collusive agreements, unlike prisoners. 
D)  students who cheat on economics exams end up in jail.

Question 15

The chances of successful collusion are greatest when

Accepted Answer

A)  firms are producing a differentiated product. 
B)  there are many firms in the industry. 
C)  there are tiny firms and huge firms together in the same industry. 
D)  demand curves and cost curves are similar among the firms in the industry. 
E)  demand is falling. 
A)  firms are producing a differentiated product. 
B)  there are many firms in the industry. 
C)  there are tiny firms and huge firms together in the same industry. 
D)  demand curves and cost curves are similar among the firms in the industry. 
E)  demand is falling.

Question 16

Use the table to answer the following question.
Table 11-2
  The demand and total cost schedules of a monopolist are presented in Table 11-2. What price should a profit-maximizing monopolist charge?

Accepted Answer

A)  $10 
B)  $9 
C)  $8 
D)  $7 
A)  $10 
B)  $9 
C)  $8 
D)  $7

Question 17

Use the table to answer the following question.
Table 11-3
 
The demand and total cost schedules of a monopolist are presented in Table 11-3. What price should a profit-maximizing monopolist charge?

Accepted Answer

A)  $10 
B)  $9 
C)  $8 
D)  $7 
A)  $10 
B)  $9 
C)  $8 
D)  $7

Question 18

The price charged by oligopolists will

Accepted Answer

A)  equal the equilibrium price in a price-takers market if the oligopolists collude. 
B)  equal the monopoly price if the oligopolists do not collude. 
C)  generally fall between the monopoly and competitive market equilibrium prices. 
D)  be the same whether the oligopolists cooperate with one another or not; only profit is affected. 
A)  equal the equilibrium price in a price-takers market if the oligopolists collude. 
B)  equal the monopoly price if the oligopolists do not collude. 
C)  generally fall between the monopoly and competitive market equilibrium prices. 
D)  be the same whether the oligopolists cooperate with one another or not; only profit is affected.

Question 19

Figure 11-5  
Indicate the maximum profit (or minimum loss) a pure monopolist with the cost and demand conditions depicted in Figure 11-5 would be able to achieve.

Accepted Answer

A)  profit of AIHE 
B)  profit of BKJC 
C)  losses of BKJC 
D)  losses of EHGF 
A)  profit of AIHE 
B)  profit of BKJC 
C)  losses of BKJC 
D)  losses of EHGF

Question 20

New York City limits the number of taxi cabs that can legally operate in the city. The most likely result of this practice is that

Accepted Answer

A)  cab fares will be lower. 
B)  cab fares will be higher. 
C)  the cost of operating a taxicab will be lower. 
D)  subway fares will decrease. 
A)  cab fares will be lower. 
B)  cab fares will be higher. 
C)  the cost of operating a taxicab will be lower. 
D)  subway fares will decrease.

A monopolist will maximize profits by

Use the figure to answer the following question(s). Figure 11-8 The demand and cost conditions in an industry are as depicted in Figure 11-8. In the viewpoint of economic efficiency, what would the ideal price and output be?

Which of the following best fits the definition of a monopoly?

Use the figure to answer the following question(s). Figure 11-12 Figure 11-12 indicates the industry cost and demand conditions for a product produced in an oligopolistic industry. The price of this product is most likely to be

The figure below illustrates the cost and revenue structure for a monopoly firm. Figure 11-17 Refer to Figure 11-17. The demand curve for a monopoly firm is depicted by curve

Use the figure to answer the following question(s). Figure 11-2 What is the maximum profit per month that the monopolist will be able to earn in Figure 11-2?

Figure 11-20 At the profit-maximizing level of production, the monopoly in Figure 11-20 will have total revenue of

As a group, oligopolists would always earn the highest profit if they would

Empirical studies show that the after-tax accounting profits of manufacturing corporations are approximately what percent of sales?

Which of the following will reduce the likelihood of effective collusion among oligopolistic producers?

Which of the following constitutes a barrier limiting the entry of potential competitors into a market?

Which of the following will be an obstacle to oligopolistic collusion in a market?

Government-operated firms with monopoly power

The prisoners' dilemma is used to illustrate the basic idea that

The chances of successful collusion are greatest when

Use the table to answer the following question. Table 11-2 The demand and total cost schedules of a monopolist are presented in Table 11-2. What price should a profit-maximizing monopolist charge?

Use the table to answer the following question. Table 11-3 The demand and total cost schedules of a monopolist are presented in Table 11-3. What price should a profit-maximizing monopolist charge?

The price charged by oligopolists will

Figure 11-5 Indicate the maximum profit (or minimum loss) a pure monopolist with the cost and demand conditions depicted in Figure 11-5 would be able to achieve.

New York City limits the number of taxi cabs that can legally operate in the city. The most likely result of this practice is that

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

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Exam 11: Price-Searcher Markets With High Entry Barriers

A monopolist will maximize profits by

Use the figure to answer the following question(s). Figure 11-8 The demand and cost conditions in an industry are as depicted in Figure 11-8. In the viewpoint of economic efficiency, what would the ideal price and output be?

Which of the following best fits the definition of a monopoly?

Use the figure to answer the following question(s). Figure 11-12 Figure 11-12 indicates the industry cost and demand conditions for a product produced in an oligopolistic industry. The price of this product is most likely to be

The figure below illustrates the cost and revenue structure for a monopoly firm. Figure 11-17 Refer to Figure 11-17. The demand curve for a monopoly firm is depicted by curve

Use the figure to answer the following question(s). Figure 11-2 What is the maximum profit per month that the monopolist will be able to earn in Figure 11-2?

Figure 11-20 At the profit-maximizing level of production, the monopoly in Figure 11-20 will have total revenue of

As a group, oligopolists would always earn the highest profit if they would

Empirical studies show that the after-tax accounting profits of manufacturing corporations are approximately what percent of sales?

Which of the following will reduce the likelihood of effective collusion among oligopolistic producers?

Which of the following constitutes a barrier limiting the entry of potential competitors into a market?

Which of the following will be an obstacle to oligopolistic collusion in a market?

Government-operated firms with monopoly power

The prisoners' dilemma is used to illustrate the basic idea that

The chances of successful collusion are greatest when

Use the table to answer the following question. Table 11-2 The demand and total cost schedules of a monopolist are presented in Table 11-2. What price should a profit-maximizing monopolist charge?

Use the table to answer the following question. Table 11-3 The demand and total cost schedules of a monopolist are presented in Table 11-3. What price should a profit-maximizing monopolist charge?

The price charged by oligopolists will

Figure 11-5 Indicate the maximum profit (or minimum loss) a pure monopolist with the cost and demand conditions depicted in Figure 11-5 would be able to achieve.

New York City limits the number of taxi cabs that can legally operate in the city. The most likely result of this practice is that

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters