Question 1

A perfectly price-discriminating monopolist is able to

Accepted Answer

A) maximize profit and produce a socially-optimal level of output. 
B) maximize profit, but not produce a socially-optimal level of output. 
C) produce a socially-optimal level of output, but not maximize profit. 
D) exercise illegal preferences regarding the race and/or gender of its employees. 
A) maximize profit and produce a socially-optimal level of output. 
B) maximize profit, but not produce a socially-optimal level of output. 
C) produce a socially-optimal level of output, but not maximize profit. 
D) exercise illegal preferences regarding the race and/or gender of its employees.

Question 2

Figure 15-6
  
-Refer to Figure 15-6.To maximize total surplus,a benevolent social planner would choose which of the following outcomes?

Accepted Answer

A) 100 units of output and a price of $10 per unit 
B) 150 units of output and a price of $10 per unit 
C) 150 units of output and a price of $15 per unit 
D) 200 units of output and a price of $10 per unit 
A) 100 units of output and a price of $10 per unit 
B) 150 units of output and a price of $10 per unit 
C) 150 units of output and a price of $15 per unit 
D) 200 units of output and a price of $10 per unit

Question 3

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3,then marginal revenue of selling the eighth unit is equal to

Accepted Answer

A) $3. 
B) $4. 
C) $24. 
D) -$4. 
A) $3. 
B) $4. 
C) $24. 
D) -$4.

Question 4

A firm that is the sole seller of a product without close substitutes is

Accepted Answer

A) perfectly competitive. 
B) monopolistically competitive. 
C) an oligopolist 
D) a monopolist 
A) perfectly competitive. 
B) monopolistically competitive. 
C) an oligopolist 
D) a monopolist

Question 5

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 6

A monopolist faces the following demand curve:  
The monopolist has total fixed costs of $40 and a constant marginal cost of $5.At the profit-maximizing level of output,the monopolist's average total cost is

Accepted Answer

A) $9.00 
B) $7.50 
C) $6.74 
D) $5.82 
A) $9.00 
B) $7.50 
C) $6.74 
D) $5.82

Question 7

Figure 15-7
The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist.
  
-Refer to Figure 15-7.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Accepted Answer

A) $0. 
B) $100. 
C) $200. 
D) $500. 
A) $0. 
B) $100. 
C) $200. 
D) $500.

Question 8

With perfect price discrimination

Accepted Answer

A) the monopoly eliminates all price discrimination by charging each customer the same price. 
B) the monopoly charges each customer an amount equal to the monopolist's marginal cost of production. 
C) the deadweight loss from monopoly is eliminated. 
D) consumer surplus is gained as monopoly profits are eliminated. 
A) the monopoly eliminates all price discrimination by charging each customer the same price. 
B) the monopoly charges each customer an amount equal to the monopolist's marginal cost of production. 
C) the deadweight loss from monopoly is eliminated. 
D) consumer surplus is gained as monopoly profits are eliminated.

Question 9

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-3.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A) P₃ × Q₂. 
B) P₂ × Q₄. 
C) (P₃ - P₀) × Q₂. 
D) (P₃ - P₀) × Q₄. 
A) P₃ × Q₂. 
B) P₂ × Q₄. 
C) (P₃ - P₀) × Q₂. 
D) (P₃ - P₀) × Q₄.

Question 10

Price discrimination explains why Ivy League universities often set rules that determine prices of admission based on students'

Accepted Answer

A) age. 
B) financial resources. 
C) high school GPA. 
D) gender. 
A) age. 
B) financial resources. 
C) high school GPA. 
D) gender.

Question 11

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Accepted Answer

A) is unaffected. 
B) decreases. 
C) increases. 
D) There is not enough information given in answer the question. 
A) is unaffected. 
B) decreases. 
C) increases. 
D) There is not enough information given in answer the question.

Question 12

Table 15-2
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information.
  
-Refer to Table 15-2.What is the total revenue from selling 8 shirts?

Accepted Answer

A) $90 
B) $695 
C) $720 
D) $800 
A) $90 
B) $695 
C) $720 
D) $800

Question 13

Table 15-2
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information.
  
-Refer to Table 15-2.What is the total revenue from selling 6 shirts?

Accepted Answer

A) $100 
B) $600 
C) $625 
D) $660 
A) $100 
B) $600 
C) $625 
D) $660

Question 14

Marginal revenue can become negative for

Accepted Answer

A) both competitive and monopoly firms. 
B) competitive firms, but not for monopoly firms. 
C) monopoly firms, but not for competitive firms. 
D) neither competitive nor monopoly firms. 
A) both competitive and monopoly firms. 
B) competitive firms, but not for monopoly firms. 
C) monopoly firms, but not for competitive firms. 
D) neither competitive nor monopoly firms.

Question 15

The simplest way for a monopoly to arise is for a single firm to

Accepted Answer

A) decrease its price below its competitors' prices. 
B) decrease production to increase demand for its product. 
C) make pricing decisions jointly with other firms. 
D) own a key resource. 
A) decrease its price below its competitors' prices. 
B) decrease production to increase demand for its product. 
C) make pricing decisions jointly with other firms. 
D) own a key resource.

Question 16

Figure 15-4
The figure below depicts the demand and marginal cost curves of a profit-maximizing monopolist.
  
-Refer to Figure 15-4.If the monopoly operates at an output level below Q₀,then an increase in output toward Q₀ (but not so large an increase as to exceed Q₀)would

Accepted Answer

A) raise the price and raise total surplus. 
B) lower the price and raise total surplus. 
C) raise the price and lower total surplus. 
D) lower the price and lower total surplus. 
A) raise the price and raise total surplus. 
B) lower the price and raise total surplus. 
C) raise the price and lower total surplus. 
D) lower the price and lower total surplus.

Question 17

A monopolist produces

Accepted Answer

A) more than the socially efficient quantity of output, but at a higher price than in a competitive market. 
B) less than the socially efficient quantity of output, but at a higher price than in a competitive market. 
C) the socially efficient quantity of output, but at a higher price than in a competitive market. 
D) possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market. 
A) more than the socially efficient quantity of output, but at a higher price than in a competitive market. 
B) less than the socially efficient quantity of output, but at a higher price than in a competitive market. 
C) the socially efficient quantity of output, but at a higher price than in a competitive market. 
D) possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market.

Question 18

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-2.Profit will be maximized by charging a price equal to

Accepted Answer

A) P₀. 
B) P₁. 
C) P₂. 
D) P₃. 
A) P₀. 
B) P₁. 
C) P₂. 
D) P₃.

Question 19

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-2.The marginal cost 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 20

For a monopolist,

Accepted Answer

A) average revenue is always greater than the price of the good. 
B) marginal revenue is always less than the price of the good. 
C) marginal cost is always greater than average total cost. 
D) marginal revenue equals marginal cost at the point where total revenue is maximized. 
A) average revenue is always greater than the price of the good. 
B) marginal revenue is always less than the price of the good. 
C) marginal cost is always greater than average total cost. 
D) marginal revenue equals marginal cost at the point where total revenue is maximized.

Exam 15: Monopoly

A perfectly price-discriminating monopolist is able to

Figure 15-6 -Refer to Figure 15-6.To maximize total surplus,a benevolent social planner would choose which of the following outcomes?

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3,then marginal revenue of selling the eighth unit is equal to

A firm that is the sole seller of a product without close substitutes is

When a monopoly increases its output and sales,

A monopolist faces the following demand curve: The monopolist has total fixed costs of $40 and a constant marginal cost of $5.At the profit-maximizing level of output,the monopolist's average total cost is

Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. -Refer to Figure 15-7.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

With perfect price discrimination

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.A profit-maximizing monopoly's profit is equal to

Price discrimination explains why Ivy League universities often set rules that determine prices of admission based on students'

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Table 15-2 Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. -Refer to Table 15-2.What is the total revenue from selling 8 shirts?

Table 15-2 Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. -Refer to Table 15-2.What is the total revenue from selling 6 shirts?

Marginal revenue can become negative for

The simplest way for a monopoly to arise is for a single firm to

Figure 15-4 The figure below depicts the demand and marginal cost curves of a profit-maximizing monopolist. -Refer to Figure 15-4.If the monopoly operates at an output level below Q₀,then an increase in output toward Q₀ (but not so large an increase as to exceed Q₀)would

A monopolist produces

Figure 15-2 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.Profit will be maximized by charging a price equal to

Figure 15-2 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.The marginal cost curve for a monopoly firm is depicted by curve

For a monopolist,

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters