Question 1

The U.S.Postal Service

Accepted Answer

A) has its monopoly status guaranteed by government franchise 
B) enforces copyrights and patents in the United States. 
C) owes its monopoly status to network externalities 
D) is a monopoly because it controls a scarce resource 
E) has a horizontal average total cost curve 
A) has its monopoly status guaranteed by government franchise 
B) enforces copyrights and patents in the United States. 
C) owes its monopoly status to network externalities 
D) is a monopoly because it controls a scarce resource 
E) has a horizontal average total cost curve

Question 2

A natural monopoly is producing an output level of 1,000 units per day.If the monopoly is broken up into 5 firms,then average total cost for each of the 5 firms

Accepted Answer

A) will exceed the monopolist's average total cost 
B) will equal the monopolist's average total cost 
C) will fall below the monopolist's average total cost 
D) may equal or fall below the monopolist's average total cost 
E) may equal or exceed the monopolist's average total cost 
A) will exceed the monopolist's average total cost 
B) will equal the monopolist's average total cost 
C) will fall below the monopolist's average total cost 
D) may equal or fall below the monopolist's average total cost 
E) may equal or exceed the monopolist's average total cost

Question 3

Which of the following could be a barrier to entry?

Accepted Answer

A) diseconomies of scale 
B) a large number of buyers and sellers 
C) a standardized product 
D) economies of scale 
E) diseconomies of scope 
A) diseconomies of scale 
B) a large number of buyers and sellers 
C) a standardized product 
D) economies of scale 
E) diseconomies of scope

Question 4

A market which only allows only one firm to operate at lowest average cost is called a(n)

Accepted Answer

A) natural monopoly. 
B) scale industry. 
C) increasing returns industry. 
D) large scale industry. 
A) natural monopoly. 
B) scale industry. 
C) increasing returns industry. 
D) large scale industry.

Question 5

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

Accepted Answer

A) economies of scale 
B) rent seeking 
C) advertising 
D) government regulations 
E) public relations 
A) economies of scale 
B) rent seeking 
C) advertising 
D) government regulations 
E) public relations

Question 6

If average total cost per unit is minimized when a single producer supplies the entire market,this indicates

Accepted Answer

A) the presence of limit pricing 
B) that the single producer is a perfect monopoly 
C) the presence of substantial economies of scale 
D) that the market has been narrowly defined 
E) the existence of a single-price monopoly 
A) the presence of limit pricing 
B) that the single producer is a perfect monopoly 
C) the presence of substantial economies of scale 
D) that the market has been narrowly defined 
E) the existence of a single-price monopoly

Question 7

The United States Postal Service is an example of a monopoly created by

Accepted Answer

A) government franchise. 
B) copyright. 
C) control of scarce inputs. 
D) rent-seeking behavior. 
A) government franchise. 
B) copyright. 
C) control of scarce inputs. 
D) rent-seeking behavior.

Question 8

If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run,this monopolist

Accepted Answer

A) will always exit the market in the long run 
B) will be forced by the government to continue operating in the long run 
C) may continue operating in order to avoid alienating its customers 
D) will exit the market in the long run only if it cannot cover its fixed costs 
E) will use limit pricing to reduce the size of its loss 
A) will always exit the market in the long run 
B) will be forced by the government to continue operating in the long run 
C) may continue operating in order to avoid alienating its customers 
D) will exit the market in the long run only if it cannot cover its fixed costs 
E) will use limit pricing to reduce the size of its loss

Question 9

Movie theaters charge lower prices to children and senior citizens because

Accepted Answer

A) they feel sorry for them. 
B) they go to more movies,so they get price breaks. 
C) their elasticity of demand for movie tickets is higher. 
D) they have more time to attend movies. 
A) they feel sorry for them. 
B) they go to more movies,so they get price breaks. 
C) their elasticity of demand for movie tickets is higher. 
D) they have more time to attend movies.

Question 10

Absent an ability to price discriminate,if a monopoly wants to sell more output,it must

Accepted Answer

A) raise its price 
B) lower its price 
C) increase barriers to entry 
D) obtain government permission 
E) negate its patent protection 
A) raise its price 
B) lower its price 
C) increase barriers to entry 
D) obtain government permission 
E) negate its patent protection

Question 11

If a firm charges each consumer the absolute maximum price that he or she is willing to pay,the firm is practicing

Accepted Answer

A) perfect price discrimination. 
B) marginal revenue pricing. 
C) price discrimination. 
D) monopoly pricing. 
A) perfect price discrimination. 
B) marginal revenue pricing. 
C) price discrimination. 
D) monopoly pricing.

Question 12

Suppose that for a monopolist,MR = MC = $10 and P = $15 at the profit-maximizing level of output.At this level of output,the firm

Accepted Answer

A) is earning a profit 
B) will shut down if AVC > $15 
C) is making $5 profit on each unit sold 
D) will shut down if ATC > $15 
E) is losing $5 per unit produced 
A) is earning a profit 
B) will shut down if AVC > $15 
C) is making $5 profit on each unit sold 
D) will shut down if ATC > $15 
E) is losing $5 per unit produced

Question 13

All of the following might be considered rent-seeking behavior by firms,except one.Which is the exception?

Accepted Answer

A) bribes to government officials 
B) money spent on lobbying government officials 
C) advertisements describing the firm's position on an issue under legislative review 
D) money spent on advertising for new products 
E) time spent testifying before state and federal committees 
A) bribes to government officials 
B) money spent on lobbying government officials 
C) advertisements describing the firm's position on an issue under legislative review 
D) money spent on advertising for new products 
E) time spent testifying before state and federal committees

Question 14

Which of the following statements is true of a monopolist?

Accepted Answer

A) It can raise price without losing sales,since there are no competitors. 
B) At a given price,it can sell all of the output that it can produce. 
C) It is able to choose a price & output combination to the right of its demand schedule. 
D) At a given price it can sell only one particular output level. 
A) It can raise price without losing sales,since there are no competitors. 
B) At a given price,it can sell all of the output that it can produce. 
C) It is able to choose a price & output combination to the right of its demand schedule. 
D) At a given price it can sell only one particular output level.

Question 15

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Accepted Answer

A) Both face downward-sloping demand curves for their output. 
B) Both produce all output units for which marginal revenue exceeds marginal cost. 
C) Both produce in the range where marginal revenue is positive. 
D) Both are price setters. 
E) Both produce an output level for which price exceeds marginal cost. 
A) Both face downward-sloping demand curves for their output. 
B) Both produce all output units for which marginal revenue exceeds marginal cost. 
C) Both produce in the range where marginal revenue is positive. 
D) Both are price setters. 
E) Both produce an output level for which price exceeds marginal cost.

Question 16

Which of the following would be the most difficult consumer characteristic for firms to use in price discrimination?

Accepted Answer

A) gender 
B) age 
C) height 
D) educational attainment 
E) weight 
A) gender 
B) age 
C) height 
D) educational attainment 
E) weight

Question 17

A single-price monopoly with the same market demand and cost structure as a perfectly competitive market will produce

Accepted Answer

A) the same output level at the same price as the perfectly competitive market 
B) less because the monopolist will not produce all units for which marginal revenue exceeds its marginal cost 
C) less since the monopolist's marginal revenue curve lies below its demand curve 
D) more because the monopolist will be more efficient 
E) more because the monopolist's marginal cost curve slopes upward 
A) the same output level at the same price as the perfectly competitive market 
B) less because the monopolist will not produce all units for which marginal revenue exceeds its marginal cost 
C) less since the monopolist's marginal revenue curve lies below its demand curve 
D) more because the monopolist will be more efficient 
E) more because the monopolist's marginal cost curve slopes upward

Question 18

Which of the following are government franchises?

Accepted Answer

A) Regional phone companies. 
B) The United States Postal Service. 
C) Electric utilities. 
D) All of the above. 
A) Regional phone companies. 
B) The United States Postal Service. 
C) Electric utilities. 
D) All of the above.

Question 19

When a non-discriminating monopolist is maximizing profit,then

Accepted Answer

A) its price equals its marginal cost 
B) its price equals its marginal revenue 
C) it is producing all units for which marginal revenue exceeds marginal cost 
D) its supply curve intersects the market demand curve 
E) its marginal cost curve intersects the market demand curve 
A) its price equals its marginal cost 
B) its price equals its marginal revenue 
C) it is producing all units for which marginal revenue exceeds marginal cost 
D) its supply curve intersects the market demand curve 
E) its marginal cost curve intersects the market demand curve

Question 20

-The firm illustrated in Figure 10-8 will charge a single price of

Accepted Answer

A) approximately $125 
B) approximately $250 
C) approximately $275 
D) approximately $300 
E) more than $325 
A) approximately $125 
B) approximately $250 
C) approximately $275 
D) approximately $300 
E) more than $325

The U.S.Postal Service

A natural monopoly is producing an output level of 1,000 units per day.If the monopoly is broken up into 5 firms,then average total cost for each of the 5 firms

Which of the following could be a barrier to entry?

A market which only allows only one firm to operate at lowest average cost is called a(n)

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

If average total cost per unit is minimized when a single producer supplies the entire market,this indicates

The United States Postal Service is an example of a monopoly created by

If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run,this monopolist

Movie theaters charge lower prices to children and senior citizens because

Absent an ability to price discriminate,if a monopoly wants to sell more output,it must

If a firm charges each consumer the absolute maximum price that he or she is willing to pay,the firm is practicing

Suppose that for a monopolist,MR = MC = $10 and P = $15 at the profit-maximizing level of output.At this level of output,the firm

All of the following might be considered rent-seeking behavior by firms,except one.Which is the exception?

Which of the following statements is true of a monopolist?

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Which of the following would be the most difficult consumer characteristic for firms to use in price discrimination?

A single-price monopoly with the same market demand and cost structure as a perfectly competitive market will produce

Which of the following are government franchises?

When a non-discriminating monopolist is maximizing profit,then

-The firm illustrated in Figure 10-8 will charge a single price of

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 11: Monopoly

The U.S.Postal Service

A natural monopoly is producing an output level of 1,000 units per day.If the monopoly is broken up into 5 firms,then average total cost for each of the 5 firms

Which of the following could be a barrier to entry?

A market which only allows only one firm to operate at lowest average cost is called a(n)

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

If average total cost per unit is minimized when a single producer supplies the entire market,this indicates

The United States Postal Service is an example of a monopoly created by

If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run,this monopolist

Movie theaters charge lower prices to children and senior citizens because

Absent an ability to price discriminate,if a monopoly wants to sell more output,it must

If a firm charges each consumer the absolute maximum price that he or she is willing to pay,the firm is practicing

Suppose that for a monopolist,MR = MC = $10 and P = $15 at the profit-maximizing level of output.At this level of output,the firm

All of the following might be considered rent-seeking behavior by firms,except one.Which is the exception?

Which of the following statements is true of a monopolist?

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Which of the following would be the most difficult consumer characteristic for firms to use in price discrimination?

A single-price monopoly with the same market demand and cost structure as a perfectly competitive market will produce

Which of the following are government franchises?

When a non-discriminating monopolist is maximizing profit,then

-The firm illustrated in Figure 10-8 will charge a single price of

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters