Question 1

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Accepted Answer

A) the tendency for efficient management of publicly owned enterprises. 
B) the inability of private monopolies to get rid of managers that are doing a bad job. 
C) the propensity of private monopolies to generate excessive profits. 
D) how ownership of the firm affects the cost of production. 
A) the tendency for efficient management of publicly owned enterprises. 
B) the inability of private monopolies to get rid of managers that are doing a bad job. 
C) the propensity of private monopolies to generate excessive profits. 
D) how ownership of the firm affects the cost of production.

Question 2

The process of buying a good in one market at a low price and selling the good in another market for a higher price in order to profit from the price difference is known as

Accepted Answer

A) sabotage. 
B) conspiracy. 
C) arbitrage. 
D) collusion. 
A) sabotage. 
B) conspiracy. 
C) arbitrage. 
D) collusion.

Question 3

Customers who purchase a book from Dave's Bookstore are charged 20% more than customers who purchase the same book from the Dave's Bookstore website.This is an example of

Accepted Answer

A) perfect price discrimination. 
B) price discrimination. 
C) deadweight loss. 
D) socially inefficient output. 
A) perfect price discrimination. 
B) price discrimination. 
C) deadweight loss. 
D) socially inefficient output.

Question 4

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

Accepted Answer

A) True 
 B)False

Question 5

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.

Accepted Answer

A) $90 
B) $105 
C) $180 
D) Not enough information is given to determine the answer. 
A) $90 
B) $105 
C) $180 
D) Not enough information is given to determine the answer.

Question 6

The supply curve for the monopolist

Accepted Answer

A) is horizontal. 
B) is vertical. 
C) is upward sloping. 
D) does not exist. 
A) is horizontal. 
B) is vertical. 
C) is upward sloping. 
D) does not exist.

Question 7

Which of the following is not a way the government can respond to the inefficient allocation of resources associated with monopolies?

Accepted Answer

A) Preventing mergers through antitrust laws. 
B) Regulating the prices that monopolies can charge. 
C) Requiring the monopolies to produce more than their profit-maximizing level of output. 
D) Running the monopoly itself. 
A) Preventing mergers through antitrust laws. 
B) Regulating the prices that monopolies can charge. 
C) Requiring the monopolies to produce more than their profit-maximizing level of output. 
D) Running the monopoly itself.

Question 8

Table 15-5
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. Assume that Dreher's is able to engage in perfect price discrimination.
  
-Refer to Table 15-5.What is the marginal revenue from selling the 5th shirt?

Accepted Answer

A) $80 
B) $100 
C) $110 
D) $120 
A) $80 
B) $100 
C) $110 
D) $120

Question 9

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 there are no fixed costs of production,monopoly profit without price discrimination equals

Accepted Answer

A) $500. 
B) $1,000. 
C) $2,000. 
D) $4,000. 
A) $500. 
B) $1,000. 
C) $2,000. 
D) $4,000.

Question 10

If one were to compare a competitive market to a monopoly that engages in perfect price discrimination,one could say that

Accepted Answer

A) in both cases, total social welfare is the same. 
B) total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly. 
C) in both cases, some potentially mutually beneficial trades do not occur. 
D) consumer surplus is the same in both cases. 
A) in both cases, total social welfare is the same. 
B) total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly. 
C) in both cases, some potentially mutually beneficial trades do not occur. 
D) consumer surplus is the same in both cases.

Question 11

After the patent runs out on a brand name drug,generic drugs,which have the same effect as the branded drug,enter the market.Because of this

Accepted Answer

A) the price increases and total surplus decreases. 
B) the price decreases and total surplus decreases. 
C) the price decreases and total surplus increases. 
D) the price increases and total surplus increases. 
A) the price increases and total surplus decreases. 
B) the price decreases and total surplus decreases. 
C) the price decreases and total surplus increases. 
D) the price increases and total surplus increases.

Question 12

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-For a monopoly firm,the shape and position of the demand curve play a role in determining (i)	the profit-maximizing price.
(ii)	the shape and position of the marginal cost curve.
(iii)	the shape and position of the marginal revenue curve.

Accepted Answer

A) (i) and (ii) 
B) (ii) and (iii) 
C) (i) and (iii) 
D) (i), (ii), and (iii) 
A) (i) and (ii) 
B) (ii) and (iii) 
C) (i) and (iii) 
D) (i), (ii), and (iii)

Question 13

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Using your understanding of monopolies,discuss the likely effect of deregulation on prices in these two industries.

Accepted Answer

If deregulation leads to increased compe

Question 14

What are the four ways that government policymakers can respond to the problem of monopoly?

Accepted Answer

Trying to make monopolized ind

Question 15

Table 15-5
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. Assume that Dreher's is able to engage in perfect price discrimination.
  
-Refer to Table 15-5.What is total profit at the profit-maximizing quantity?

Accepted Answer

A) $325 
B) $435 
C) $565 
D) $1000 
A) $325 
B) $435 
C) $565 
D) $1000

Question 16

Table 15-4
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-4.The maximum profit this monopolist can earn is

Accepted Answer

A) $5. 
B) $15. 
C) $16 
D) $28 
A) $5. 
B) $15. 
C) $16 
D) $28

Question 17

In a market characterized by monopoly,the market demand curve is

Accepted Answer

A) upward sloping. 
B) horizontal. 
C) downward sloping. 
D) vertical. 
A) upward sloping. 
B) horizontal. 
C) downward sloping. 
D) vertical.

Question 18

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 is NOT allowed to price discriminate,then consumer surplus amounts to

Accepted Answer

A) $0. 
B) $500. 
C) $1,000. 
D) $2,000. 
A) $0. 
B) $500. 
C) $1,000. 
D) $2,000.

Question 19

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Accepted Answer

A) offset by regulatory revenues. 
B) called a deadweight loss. 
C) equal to the monopolist's profit. 
D) Both b and c are correct. 
A) offset by regulatory revenues. 
B) called a deadweight loss. 
C) equal to the monopolist's profit. 
D) Both b and c are correct.

Question 20

By offering lower prices to customers who buy a large quantity,a monopoly is price discriminating.

Accepted Answer

A) True 
 B)False

Exam 15: Monopoly

The key issue in determining the efficiency of public versus private ownership of a monopoly is

The process of buying a good in one market at a low price and selling the good in another market for a higher price in order to profit from the price difference is known as

Customers who purchase a book from Dave's Bookstore are charged 20% more than customers who purchase the same book from the Dave's Bookstore website.This is an example of

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.

The supply curve for the monopolist

Which of the following is not a way the government can respond to the inefficient allocation of resources associated with monopolies?

Table 15-5 Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. Assume that Dreher's is able to engage in perfect price discrimination. -Refer to Table 15-5.What is the marginal revenue from selling the 5th shirt?

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 there are no fixed costs of production,monopoly profit without price discrimination equals

If one were to compare a competitive market to a monopoly that engages in perfect price discrimination,one could say that

After the patent runs out on a brand name drug,generic drugs,which have the same effect as the branded drug,enter the market.Because of this

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Using your understanding of monopolies,discuss the likely effect of deregulation on prices in these two industries.

What are the four ways that government policymakers can respond to the problem of monopoly?

Table 15-5 Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. Assume that Dreher's is able to engage in perfect price discrimination. -Refer to Table 15-5.What is total profit at the profit-maximizing quantity?

Table 15-4 Consider the following demand and cost information for a monopoly. -Refer to Table 15-4.The maximum profit this monopolist can earn is

In a market characterized by monopoly,the market demand curve 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 is NOT allowed to price discriminate,then consumer surplus amounts to

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

By offering lower prices to customers who buy a large quantity,a monopoly is price discriminating.

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