Question 1

Price discrimination often permits some consumers,who otherwise would be excluded from a market,to buy a good or service.

Accepted Answer

A) True 
 B)False

Question 2

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve,total revenue is:

Accepted Answer

A) greater than 1. 
B) maximum. 
C) less than 1. 
D) equal to zero. 
E) not determinable. 
A) greater than 1. 
B) maximum. 
C) less than 1. 
D) equal to zero. 
E) not determinable.

Question 3

The only hairdresser in a small town is an example of:

Accepted Answer

A) monopsy. 
B) luxury. 
C) monopoly. 
D) oligopoly. 
E) competition. 
A) monopsy. 
B) luxury. 
C) monopoly. 
D) oligopoly. 
E) competition.

Question 4

Exhibit 8-1 Monopolist's demand curve
  
-Which of the following points in Exhibit 8-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?

Accepted Answer

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

Question 5

Price discrimination occurs when:

Accepted Answer

A) for the same product, a seller charges different customers different prices justified by cost differences. 
B) for the different product, a seller charges different customers different prices not justified by cost differences. 
C) for the different product, a seller charges the same customers different prices not justified by cost differences. 
D) for the same product, a seller charges different customers different prices not justified by cost differences. 
A) for the same product, a seller charges different customers different prices justified by cost differences. 
B) for the different product, a seller charges different customers different prices not justified by cost differences. 
C) for the different product, a seller charges the same customers different prices not justified by cost differences. 
D) for the same product, a seller charges different customers different prices not justified by cost differences.

Question 6

For every level of output,marginal revenue is:

Accepted Answer

A) higher than price. 
B) less than price. 
C) equal to price. 
D) undetermined. 
A) higher than price. 
B) less than price. 
C) equal to price. 
D) undetermined.

Question 7

Perfect competition is considered more efficient than monopoly because,in perfect competition:

Accepted Answer

A) P = MC, while in monopoly P  MC. 
C) they sell a homogeneous product. 
D) entry is prohibited. 
A) P = MC, while in monopoly P  MC. 
C) they sell a homogeneous product. 
D) entry is prohibited.

Question 8

Arbitrage is the practice of:

Accepted Answer

A) earning a profit by buying and reselling goods and services. 
B) redistributing the profit from monopoly to consumers. 
C) losing a profit by buying and reselling goods and services. 
D) producing goods and services for reselling. 
A) earning a profit by buying and reselling goods and services. 
B) redistributing the profit from monopoly to consumers. 
C) losing a profit by buying and reselling goods and services. 
D) producing goods and services for reselling.

Question 9

Exhibit 8-7
  
-According to Exhibit 8-7,if one firm were to buy all of the other firms in the market and become a monopoly,we could expect which of the following to occur?

Accepted Answer

A) Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B) Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C) Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D) Price to rise from P1 to P0 and output to rise from Q1 to Q2. 
E) Price to fall from P1 to P0 and output to fall from Q2 to Q1. 
A) Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B) Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C) Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D) Price to rise from P1 to P0 and output to rise from Q1 to Q2. 
E) Price to fall from P1 to P0 and output to fall from Q2 to Q1.

Question 10

A monopoly can successfully price-discriminate as long as there is no competition.

Accepted Answer

A) True 
 B)False

Question 11

A monopolist earning economic profit in the short run determines that,at its present level of output,marginal revenue is $23 and marginal cost is $30.Which of the following should the firm do to increase profit?

Accepted Answer

A) Raise price or lower output. 
B) Lower price. 
C) Raise output. 
D) Lower price and raise output. 
E) Lower output but leave price unchanged. 
A) Raise price or lower output. 
B) Lower price. 
C) Raise output. 
D) Lower price and raise output. 
E) Lower output but leave price unchanged.

Question 12

A common criticism of price discrimination is that it seems to:

Accepted Answer

A) cost some people more for similar goods or services. 
B) cost some people more for the exact same good or service. 
C) decrease a monopolist's profits. 
D) make monopoly unviable. 
A) cost some people more for similar goods or services. 
B) cost some people more for the exact same good or service. 
C) decrease a monopolist's profits. 
D) make monopoly unviable.

Question 13

Exhibit 8-6 Monopolist
  
-According to the information provided in Exhibit 8-6,if the Rudd Ice Company is a monopoly and is currently charging a price of $8,what would you advise Rudd to do?

Accepted Answer

A) Stay where he is currently operating because he is charging the profit-maximising price. 
B) Increase price and increase output. 
C) Decrease price and increase output. 
D) Increase output and hold price constant. 
E) Increase price and hold output constant. 
A) Stay where he is currently operating because he is charging the profit-maximising price. 
B) Increase price and increase output. 
C) Decrease price and increase output. 
D) Increase output and hold price constant. 
E) Increase price and hold output constant.

Question 14

The case against monopoly is based on the following?

Accepted Answer

A) Monopolies are successful producers. 
B) Monopolies are efficient resource allocators. 
C) Monopolies are very innovative. 
D) Monopolies charge a higher price than would be under perfect competition. 
A) Monopolies are successful producers. 
B) Monopolies are efficient resource allocators. 
C) Monopolies are very innovative. 
D) Monopolies charge a higher price than would be under perfect competition.

Question 15

The only one bakery in a small regional town would face:

Accepted Answer

A) strong competition. 
B) a downward-sloping demand curve. 
C) barriers to entry. 
D) a horizontal demand curve. 
A) strong competition. 
B) a downward-sloping demand curve. 
C) barriers to entry. 
D) a horizontal demand curve.

Question 16

At a price of $5,24 units of a good would be sold.At a price of $10,25 units of output would be sold.The marginal revenue of the 25th unit of output is:

Accepted Answer

A) $14. 
B) $55. 
C) $100. 
D) $130. 
E) $175. 
A) $14. 
B) $55. 
C) $100. 
D) $130. 
E) $175.

Question 17

Arbitrage will occur:

Accepted Answer

A) when a person can buy the good at one price and then resell it at a higher price. 
B) when the monopolist wants to employ it to increase profits. 
C) when the monopolist is able to practise price discrimination. 
D) when the monopolist faces a downward-sloping demand curve. 
A) when a person can buy the good at one price and then resell it at a higher price. 
B) when the monopolist wants to employ it to increase profits. 
C) when the monopolist is able to practise price discrimination. 
D) when the monopolist faces a downward-sloping demand curve.

Question 18

The efficient allocation of resources (P = MC)occurs in:

Accepted Answer

A) perfect competition but not monopoly. 
B) monopoly but not perfect competition. 
C) neither market structure. 
D) in both market structures. 
A) perfect competition but not monopoly. 
B) monopoly but not perfect competition. 
C) neither market structure. 
D) in both market structures.

Question 19

If a good has no close substitutes,the market is likely to be:

Accepted Answer

A) a monopoly. 
B) an oligopoly. 
C) monopolistically competitive. 
D) perfectly competitive. 
E) perfectly monopolistic. 
A) a monopoly. 
B) an oligopoly. 
C) monopolistically competitive. 
D) perfectly competitive. 
E) perfectly monopolistic.

Question 20

In contrast to a perfectly competitive firm,a monopolist operates in the long run at a quantity of output at which:

Accepted Answer

A) P = MC. 
B) MR = MC. 
C) P = ATC. 
D) P > MR. 
A) P = MC. 
B) MR = MC. 
C) P = ATC. 
D) P > MR.

Price discrimination often permits some consumers,who otherwise would be excluded from a market,to buy a good or service.

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve,total revenue is:

The only hairdresser in a small town is an example of:

Exhibit 8-1 Monopolist's demand curve -Which of the following points in Exhibit 8-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?

Price discrimination occurs when:

For every level of output,marginal revenue is:

Perfect competition is considered more efficient than monopoly because,in perfect competition:

Arbitrage is the practice of:

Exhibit 8-7 -According to Exhibit 8-7,if one firm were to buy all of the other firms in the market and become a monopoly,we could expect which of the following to occur?

A monopoly can successfully price-discriminate as long as there is no competition.

A monopolist earning economic profit in the short run determines that,at its present level of output,marginal revenue is $23 and marginal cost is $30.Which of the following should the firm do to increase profit?

A common criticism of price discrimination is that it seems to:

Exhibit 8-6 Monopolist -According to the information provided in Exhibit 8-6,if the Rudd Ice Company is a monopoly and is currently charging a price of $8,what would you advise Rudd to do?

The case against monopoly is based on the following?

The only one bakery in a small regional town would face:

At a price of $5,24 units of a good would be sold.At a price of $10,25 units of output would be sold.The marginal revenue of the 25th unit of output is:

Arbitrage will occur:

The efficient allocation of resources (P = MC)occurs in:

If a good has no close substitutes,the market is likely to be:

In contrast to a perfectly competitive firm,a monopolist operates in the long run at a quantity of output at which:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 8: Monopoly

Price discrimination often permits some consumers,who otherwise would be excluded from a market,to buy a good or service.

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve,total revenue is:

The only hairdresser in a small town is an example of:

Exhibit 8-1 Monopolist's demand curve -Which of the following points in Exhibit 8-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?

Price discrimination occurs when:

For every level of output,marginal revenue is:

Perfect competition is considered more efficient than monopoly because,in perfect competition:

Arbitrage is the practice of:

Exhibit 8-7 -According to Exhibit 8-7,if one firm were to buy all of the other firms in the market and become a monopoly,we could expect which of the following to occur?

A monopoly can successfully price-discriminate as long as there is no competition.

A monopolist earning economic profit in the short run determines that,at its present level of output,marginal revenue is $23 and marginal cost is $30.Which of the following should the firm do to increase profit?

A common criticism of price discrimination is that it seems to:

Exhibit 8-6 Monopolist -According to the information provided in Exhibit 8-6,if the Rudd Ice Company is a monopoly and is currently charging a price of $8,what would you advise Rudd to do?

The case against monopoly is based on the following?

The only one bakery in a small regional town would face:

At a price of $5,24 units of a good would be sold.At a price of $10,25 units of output would be sold.The marginal revenue of the 25th unit of output is:

Arbitrage will occur:

The efficient allocation of resources (P = MC)occurs in:

If a good has no close substitutes,the market is likely to be:

In contrast to a perfectly competitive firm,a monopolist operates in the long run at a quantity of output at which:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters