Question 1

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

Accepted Answer

A)  patent 
B)  copyright 
C)  public franchise 
D)  government license 
E)  natural barrier 
A)  patent 
B)  copyright 
C)  public franchise 
D)  government license 
E)  natural barrier

Question 2

A monopoly market has

Accepted Answer

A)  a few firms. 
B)  a single firm. 
C)  two dominating firms in the market. 
D)  only two firms in it. 
E)  some unspecified number of firms in it. 
A)  a few firms. 
B)  a single firm. 
C)  two dominating firms in the market. 
D)  only two firms in it. 
E)  some unspecified number of firms in it.

Question 3

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

Accepted Answer

A)  a natural monopoly. 
B)  a marginal cost pricing rule. 
C)  an average cost pricing rule. 
D)  the capture theory of regulation. 
E)  the social interest theory of regulation. 
A)  a natural monopoly. 
B)  a marginal cost pricing rule. 
C)  an average cost pricing rule. 
D)  the capture theory of regulation. 
E)  the social interest theory of regulation.

Question 4

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot Pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,the price per pillow is

Accepted Answer

A)  $70. 
B)  $60. 
C)  $40. 
D)  $100. 
E)  $30. 
A)  $70. 
B)  $60. 
C)  $40. 
D)  $100. 
E)  $30.

Question 5

For a single-price monopolist,why is marginal revenue less than price?

Accepted Answer

A)  Because the firm is a price taker. 
B)  To sell another unit, the price must be lowered. 
C)  Demand is elastic when another unit is sold. 
D)  Demand is inelastic when another unit is sold. 
E)  The question is false because marginal revenue is always equal to price. 
A)  Because the firm is a price taker. 
B)  To sell another unit, the price must be lowered. 
C)  Demand is elastic when another unit is sold. 
D)  Demand is inelastic when another unit is sold. 
E)  The question is false because marginal revenue is always equal to price.

Question 6

A natural monopoly exists when

Accepted Answer

A)  diseconomies of scale exist in an industry. 
B)  one firm can supply an entire market at a lower average total cost than can two or more firms. 
C)  a firm can engage in price discrimination. 
D)  the producers in an industry have formed a cartel. 
E)  a monopoly firm faces a horizontal demand curve. 
A)  diseconomies of scale exist in an industry. 
B)  one firm can supply an entire market at a lower average total cost than can two or more firms. 
C)  a firm can engage in price discrimination. 
D)  the producers in an industry have formed a cartel. 
E)  a monopoly firm faces a horizontal demand curve.

Question 7

$$\begin{array} { c c } 
\text { Price(dollars) } & \text { Quantity(units) } \
6 & 1 \
5 & 2 \
4 & 3 \
3 & 4 \
2 & 5 \
1 & 6 \
\hline
\end{array}$$
-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

Accepted Answer

A)  $6 and $1. 
B)  $5 and $1. 
C)  $3 and $1. 
D)  $6 and $4. 
E)  $4 and $3. 
A)  $6 and $1. 
B)  $5 and $1. 
C)  $3 and $1. 
D)  $6 and $4. 
E)  $4 and $3.

Question 8

-Use the figure above to answer this question.Mary is the only veterinarian in a small town and rents a space for her practice.If Mary's landlord decided to charge ________ per hour in rent,Mary would ________.

Accepted Answer

A)  $20 more; earn $0 economic profit 
B)  $20 more; still earn an economic profit because she is a monopolist 
C)  $30 more; earn $0 economic profit 
D)  $10 less; raise her prices and earn a higher profit 
E)  $30 more; operate on the inelastic portion of her demand curve 
A)  $20 more; earn $0 economic profit 
B)  $20 more; still earn an economic profit because she is a monopolist 
C)  $30 more; earn $0 economic profit 
D)  $10 less; raise her prices and earn a higher profit 
E)  $30 more; operate on the inelastic portion of her demand curve

Question 9

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic,then the Red Sox's marginal revenue is

Accepted Answer

A)  negative. 
B)  positive. 
C)  zero. 
D)  maximized. 
E)  undefined. 
A)  negative. 
B)  positive. 
C)  zero. 
D)  maximized. 
E)  undefined.

Question 10

The U.S.Postal Service has a monopoly over first-class mail service because

Accepted Answer

A)  the government has granted this agency a public franchise. 
B)  stamps are copyrighted. 
C)  stamps are trademarked. 
D)  stamps are patented. 
E)  it owns a vital resource, namely all mailboxes. 
A)  the government has granted this agency a public franchise. 
B)  stamps are copyrighted. 
C)  stamps are trademarked. 
D)  stamps are patented. 
E)  it owns a vital resource, namely all mailboxes.

Question 11

A natural barrier to entry is defined as a barrier that arises because of

Accepted Answer

A)  technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms. 
B)  patents or licenses that exclude others from producing a good or service. 
C)  many firms producing the good and thereby allowing choice for all consumers. 
D)  anticompetitive practices by a firm that keep other firms from producing. 
E)  one firm owning a key natural resource. 
A)  technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms. 
B)  patents or licenses that exclude others from producing a good or service. 
C)  many firms producing the good and thereby allowing choice for all consumers. 
D)  anticompetitive practices by a firm that keep other firms from producing. 
E)  one firm owning a key natural resource.

Question 12

-The above figure shows the demand,marginal revenue,and cost curves for a natural monopoly.
a.Which price and quantity is set if the capture theory is correct?
b.If production is at the price and quantity specified in part (a),what area represents the economic profit?
c.If production is at the price and quantity specified in part (a),what area represents the deadweight loss?
d.If production is at the price and quantity specified in part (a),what area represents the consumer surplus?

Accepted Answer

a.The profit-maximizing price and quanti

Question 13

Ownership of a necessary input creates what type of barrier to entry?

Accepted Answer

A)  legal barrier to entry 
B)  natural barrier to entry 
C)  a public franchise 
D)  a government license 
E)  ownership barrier to entry 
A)  legal barrier to entry 
B)  natural barrier to entry 
C)  a public franchise 
D)  a government license 
E)  ownership barrier to entry

Question 14

Suppose a monopoly can sell 10 units of output for $21.In order to sell 11 units of output,the price must fall to $20.What is the marginal revenue of the 11th unit?

Accepted Answer

A)  $41 
B)  $20 
C)  $10 
D)  $1 
E)  $220 
A)  $41 
B)  $20 
C)  $10 
D)  $1 
E)  $220

Question 15

For a monopoly,marginal revenue is equal to

Accepted Answer

A)  the amount people buy at a given price. 
B)  the amount people buy between two prices. 
C)  the change in total revenue brought about by a one-unit increase in quantity sold. 
D)  the price multiplied by the quantity sold. 
E)  the price of the product. 
A)  the amount people buy at a given price. 
B)  the amount people buy between two prices. 
C)  the change in total revenue brought about by a one-unit increase in quantity sold. 
D)  the price multiplied by the quantity sold. 
E)  the price of the product.

Question 16

The social interest theory of regulation assumes that

Accepted Answer

A)  regulation is against the public interest. 
B)  the public is indifferent to regulation. 
C)  regulation seeks an efficient use of resources. 
D)  the public cares deeply about regulation. 
E)  regulators are captured by the firms being regulated. 
A)  regulation is against the public interest. 
B)  the public is indifferent to regulation. 
C)  regulation seeks an efficient use of resources. 
D)  the public cares deeply about regulation. 
E)  regulators are captured by the firms being regulated.

Question 17

Which of the following is correct for a single-price monopoly?
i.The firm can determine the quantity it produces and the price it charges.
ii.It would never profitably produce output in the inelastic range of its demand.
iii.Its marginal revenue is less than price.

Accepted Answer

A)  i only 
B)  i and iii 
C)  ii only 
D)  ii and iii 
E)  i, ii, and iii 
A)  i only 
B)  i and iii 
C)  ii only 
D)  ii and iii 
E)  i, ii, and iii

Question 18

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

Accepted Answer

In the short run,a monopoly can make an

Question 19

Price discrimination is possible,in part,because

Accepted Answer

A)  costs of production vary as output increases. 
B)  monopolies are regulated. 
C)  monopolies don't profit maximize. 
D)  the willingness to pay can vary among groups of buyers. 
E)  monopolies face horizontal demand curves. 
A)  costs of production vary as output increases. 
B)  monopolies are regulated. 
C)  monopolies don't profit maximize. 
D)  the willingness to pay can vary among groups of buyers. 
E)  monopolies face horizontal demand curves.

Question 20

The figure above shows a natural monopoly.
-In the figure above,if the firm is regulated using a marginal cost pricing rule,the deadweight loss created is equal to the area of

Accepted Answer

A)  ABG. 
B)  BEFG. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no deadweight loss created. 
A)  ABG. 
B)  BEFG. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no deadweight loss created.

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

A monopoly market has

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot Pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,the price per pillow is

For a single-price monopolist,why is marginal revenue less than price?

A natural monopoly exists when

Price(dollars) Quantity(units) 6 1 5 2 4 3 3 4 2 5 1 6 -The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

-Use the figure above to answer this question.Mary is the only veterinarian in a small town and rents a space for her practice.If Mary's landlord decided to charge per hour in rent,Mary would .

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic,then the Red Sox's marginal revenue is

The U.S.Postal Service has a monopoly over first-class mail service because

A natural barrier to entry is defined as a barrier that arises because of

Ownership of a necessary input creates what type of barrier to entry?

Suppose a monopoly can sell 10 units of output for $21.In order to sell 11 units of output,the price must fall to $20.What is the marginal revenue of the 11th unit?

For a monopoly,marginal revenue is equal to

The social interest theory of regulation assumes that

Which of the following is correct for a single-price monopoly? i.The firm can determine the quantity it produces and the price it charges. ii.It would never profitably produce output in the inelastic range of its demand. iii.Its marginal revenue is less than price.

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

Price discrimination is possible,in part,because

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the deadweight loss created is equal to the area of

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Monopoly

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

A monopoly market has

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot Pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,the price per pillow is

For a single-price monopolist,why is marginal revenue less than price?

A natural monopoly exists when

Price(dollars) Quantity(units) 6 1 5 2 4 3 3 4 2 5 1 6 -The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

-Use the figure above to answer this question.Mary is the only veterinarian in a small town and rents a space for her practice.If Mary's landlord decided to charge ________ per hour in rent,Mary would ________.

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic,then the Red Sox's marginal revenue is

The U.S.Postal Service has a monopoly over first-class mail service because

A natural barrier to entry is defined as a barrier that arises because of

Ownership of a necessary input creates what type of barrier to entry?

Suppose a monopoly can sell 10 units of output for $21.In order to sell 11 units of output,the price must fall to $20.What is the marginal revenue of the 11th unit?

For a monopoly,marginal revenue is equal to

The social interest theory of regulation assumes that

Which of the following is correct for a single-price monopoly? i.The firm can determine the quantity it produces and the price it charges. ii.It would never profitably produce output in the inelastic range of its demand. iii.Its marginal revenue is less than price.

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

Price discrimination is possible,in part,because

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the deadweight loss created is equal to the area of

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-Use the figure above to answer this question.Mary is the only veterinarian in a small town and rents a space for her practice.If Mary's landlord decided to charge per hour in rent,Mary would .