Question 1

Figure 15-19 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-19. The profit-maximizing price is

Accepted Answer

A)  P1. 
B)  P2. 
C)  P3. 
D)  P4. 
A)  P1. 
B)  P2. 
C)  P3. 
D)  P4. C

Question 2

-Refer to Figure 15-15. What is the economically efficient output level?

Accepted Answer

A)  Q1 units 
B)  Q2 units 
C)  Q3 units 
D)  Q4 units 
A)  Q1 units 
B)  Q2 units 
C)  Q3 units 
D)  Q4 units C

Question 3

-Refer to Figure 15-15. What is the price charged under perfect price discrimination?

Accepted Answer

A)  P3 
B)  P4 
C)  a range of prices corresponding to the demand curve from P3 and above 
D)  a range of prices corresponding to the demand curve from P4 and above 
A)  P3 
B)  P4 
C)  a range of prices corresponding to the demand curve from P3 and above 
D)  a range of prices corresponding to the demand curve from P4 and above C

Question 4

Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community, and other residents in the neighborhood. Figure 15-17 shows the demand curves for the residents of the retirement community, labeled Market A, and other residents in the neighborhood, labeled Market B. The demand curves are not identical.
-Refer to Figure 15-17. Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?

Accepted Answer

A)  the other residents of the neighborhood-market B 
B)  There is no difference in the elasticity of demand between the two groups. 
C)  the customers from "The Chateau"-market A 
D)  There is insufficient information to answer this question. 
A)  the other residents of the neighborhood-market B 
B)  There is no difference in the elasticity of demand between the two groups. 
C)  the customers from "The Chateau"-market A 
D)  There is insufficient information to answer this question.

Question 5

Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4. What is the amount of the monopoly's total revenue?

Accepted Answer

A)  $21,600 
B)  $20,400 
C)  $19,740 
D)  $7,800 
A)  $21,600 
B)  $20,400 
C)  $19,740 
D)  $7,800

Question 6

Julie plans to start a pet-sitting service. She surveyed her neighborhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 15-6 above shows a portion of her survey results.
-Refer to Table 15-6. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7. Which of the following statements is true?

Accepted Answer

A)  Julie is worse off because the demand for her services is reduced. 
B)  Julie has converted the consumer surplus (from a uniform price) into economic profit. 
C)  Julie's customers are better off because their consumer surplus has increased. 
D)  Julie's has converted the producer surplus (from a uniform price) into consumer surplus. 
A)  Julie is worse off because the demand for her services is reduced. 
B)  Julie has converted the consumer surplus (from a uniform price) into economic profit. 
C)  Julie's customers are better off because their consumer surplus has increased. 
D)  Julie's has converted the producer surplus (from a uniform price) into consumer surplus.

Question 7

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube.
-Refer to Table 15-5. What is the total revenue received from both markets combined?

Accepted Answer

A)  $30 
B)  $34 
C)  $68 
D)  $70 
A)  $30 
B)  $34 
C)  $68 
D)  $70

Question 8

The creation of the Internet and smartphones and the rise of e-mail and text messaging have led to ________ in the quantity of letters and other first-class mail since 2000.

Accepted Answer

A)  a 45 percent decline 
B)  virtually no change 
C)  a slight increase 
D)  an almost 90 percent drop 
A)  a 45 percent decline 
B)  virtually no change 
C)  a slight increase 
D)  an almost 90 percent drop

Question 9

Which of the following is not one of the four key points raised by economists and policymakers who are skeptical that large technology firms like Google, Facebook, and Amazon should be broken up or subjected to stringent new regulations?

Accepted Answer

A)  The markets these firms compete in are smaller than is sometimes realized. 
B)  New firms have the ability to enter these markets and compte with these firms. 
C)  Consumers have benefited from the services these firms offer, and those benefits might be reduced if the firms were broken up. 
D)  Congress can address concerns about privacy separately from antitrust issues. 
A)  The markets these firms compete in are smaller than is sometimes realized. 
B)  New firms have the ability to enter these markets and compte with these firms. 
C)  Consumers have benefited from the services these firms offer, and those benefits might be reduced if the firms were broken up. 
D)  Congress can address concerns about privacy separately from antitrust issues.

Question 10

Figure 15-19 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-19. What is the economically efficient output level and what is the price at that level?

Accepted Answer

A)  Q4, P1 
B)  Q3, P2 
C)  Q2, P2 
D)  Q2, P3 
A)  Q4, P1 
B)  Q3, P2 
C)  Q2, P2 
D)  Q2, P3

Question 11

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube.
-Refer to Table 15-5. Which of the following statements is true about the two markets?

Accepted Answer

A)  The demand in Middle Fall is more price elastic than the demand in West Fall. 
B)  The demand in Middle Fall is less price elastic than the demand in West Fall. 
C)  The demand in Middle Fall is more income elastic than the demand in West Fall. 
D)  The demand in Middle Fall is less income elastic than the demand in West Fall. 
A)  The demand in Middle Fall is more price elastic than the demand in West Fall. 
B)  The demand in Middle Fall is less price elastic than the demand in West Fall. 
C)  The demand in Middle Fall is more income elastic than the demand in West Fall. 
D)  The demand in Middle Fall is less income elastic than the demand in West Fall.

Question 12

Julie plans to start a pet-sitting service. She surveyed her neighborhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 15-6 above shows a portion of her survey results.
-Refer to Table 15-6. If Julie charges $10 per hour, what is the value of the consumer surplus received by Dawn?

Accepted Answer

A)  $2 
B)  $10 
C)  $12 
D)  $22 
A)  $2 
B)  $10 
C)  $12 
D)  $22

Question 13

-Refer to Figure 15-22 to answer the following questions.
a. What quantity will this monopoly produce and what price will it charge?
b. Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge?
c. To achieve economic efficiency, what quantity will the regulated monopoly produce?
d. Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency?
e. Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35. What quantity will the monopoly produce and what price will the monopoly charge?
f. With the price ceiling of $35, what profit will the monopoly earn?

Accepted Answer

a. Quantity = 835 units and Price = $59.

Question 14

Figure 15-19 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-19. Why won't regulators require that Erickson Power produce the economically efficient output level?

Accepted Answer

A)  because there is insufficient demand at that output level 
B)  because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit 
C)  because Erickson Power will earn zero profit 
D)  because Erickson Power will sustain persistent losses and will not continue in business in the long run 
A)  because there is insufficient demand at that output level 
B)  because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit 
C)  because Erickson Power will earn zero profit 
D)  because Erickson Power will sustain persistent losses and will not continue in business in the long run

Question 15

Julie plans to start a pet-sitting service. She surveyed her neighborhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 15-6 above shows a portion of her survey results.
-Refer to Table 15-6. Suppose Julie's marginal cost of providing this service is constant at $7 and she decides to charge each customer according to his or her willingness to pay. What is the value of consumer surplus by her customers?

Accepted Answer

A)  $39 
B)  $28 
C)  $11 
D)  $0 
A)  $39 
B)  $28 
C)  $11 
D)  $0

Question 16

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube.
-Refer to Table 15-5. How many tubes of toothpaste will Neem sell in West Fall and at what price?

Accepted Answer

A)  Q = 2 units; P = $4.50 
B)  Q = 3 units; P = $4 
C)  Q = 4 units; P = $3.50 
D)  Q = 5 units; P = $3 
A)  Q = 2 units; P = $4.50 
B)  Q = 3 units; P = $4 
C)  Q = 4 units; P = $3.50 
D)  Q = 5 units; P = $3

Question 17

Figure 15-20 shows the market demand and cost curves facing a natural monopoly.
-Refer to Figure 15-20. Suppose the government regulates this industry in order to remove the inefficiency implied by the behavior of the profit-maximizing owners. If regulators require that the firm produces the economically efficient output level, what is this level and what price will be charged?

Accepted Answer

A)  Q4 units; P6 
B)  Q1 units; P4 
C)  Q1 units; P1 
D)  Q3 units; P3 
A)  Q4 units; P6 
B)  Q1 units; P4 
C)  Q1 units; P1 
D)  Q3 units; P3

Question 18

Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4. What is the amount of the monopoly's profit?

Accepted Answer

A)  $2,700 
B)  $4,200 
C)  $10,400 
D)  $12,600 
A)  $2,700 
B)  $4,200 
C)  $10,400 
D)  $12,600

Question 19

-Refer to Figure 15-21 to answer the following questions.
a. What quantity will this monopoly produce and what price will it charge?
b. Suppose the government decides to regulate this monopoly and imposes a price ceiling of $25. Now what quantity will the monopoly produce and what price will it charge?
c. Will every consumer who is willing to pay the ceiling price of $25 be able to buy the product? Briefly explain.

Accepted Answer

a. To maximize profits, the monopoly wil

Question 20

Alphabet, the parent company of Google, announced it has reached an agreement to buy Fitbit in an all-cash deal for $2.1 billion. The acquisition is subject to U.S. Department of Justice (DOJ) approval. The DOJ has expressed concerns regarding the Fitbit user data that Google will have access to if the acquisition is completed, especially data sold to Google without the consent of Fitbit users. The wearable technology industry has also expressed concerns that the merger would create an industry dominated by only two firms, Google and Apple.
Source: Gabriela Barkho, "DOJ Probes Google's Fitbit Acquisition Over Consumer Health Data Concerns," observer.com, December 11, 2019.
-Refer to the Article Summary. The standards used by the Department of Justice and the FTC to evaluate a potential acquisition such as the one regarding Google and Fitbit are based on market concentration as determined by the

Accepted Answer

A)  Herfindahl-Hirschman Index. 
B)  Clayton Antitrust Act. 
C)  Anti-Collusion Task Force. 
D)  Robinson-Patman Act. 
A)  Herfindahl-Hirschman Index. 
B)  Clayton Antitrust Act. 
C)  Anti-Collusion Task Force. 
D)  Robinson-Patman Act.

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. The profit-maximizing price is

-Refer to Figure 15-15. What is the economically efficient output level?

-Refer to Figure 15-15. What is the price charged under perfect price discrimination?

Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4. What is the amount of the monopoly's total revenue?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. What is the total revenue received from both markets combined?

The creation of the Internet and smartphones and the rise of e-mail and text messaging have led to ________ in the quantity of letters and other first-class mail since 2000.

Which of the following is not one of the four key points raised by economists and policymakers who are skeptical that large technology firms like Google, Facebook, and Amazon should be broken up or subjected to stringent new regulations?

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. What is the economically efficient output level and what is the price at that level?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. Which of the following statements is true about the two markets?

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. Why won't regulators require that Erickson Power produce the economically efficient output level?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. How many tubes of toothpaste will Neem sell in West Fall and at what price?

Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4. What is the amount of the monopoly's profit?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: The Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 15: Monopoly and Antitrust Policy

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. The profit-maximizing price is

-Refer to Figure 15-15. What is the economically efficient output level?

-Refer to Figure 15-15. What is the price charged under perfect price discrimination?

Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4. What is the amount of the monopoly's total revenue?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. What is the total revenue received from both markets combined?

The creation of the Internet and smartphones and the rise of e-mail and text messaging have led to ________ in the quantity of letters and other first-class mail since 2000.

Which of the following is not one of the four key points raised by economists and policymakers who are skeptical that large technology firms like Google, Facebook, and Amazon should be broken up or subjected to stringent new regulations?

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. What is the economically efficient output level and what is the price at that level?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. Which of the following statements is true about the two markets?

Figure 15-19 shows the cost and demand curves for the Erickson Power Company. -Refer to Figure 15-19. Why won't regulators require that Erickson Power produce the economically efficient output level?

Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 15-5. The average cost of production is constant at $2 per tube. -Refer to Table 15-5. How many tubes of toothpaste will Neem sell in West Fall and at what price?

Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4. What is the amount of the monopoly's profit?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: The Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters