Question 1

If many good substitutes exist for a competitive firm's product,what type of demand curve does it face

Accepted Answer

A) unit elastic 
B) perfectly inelastic 
C) perfectly elastic 
D) inelastic only over a certain region 
A) unit elastic 
B) perfectly inelastic 
C) perfectly elastic 
D) inelastic only over a certain region

Question 2

One solution to the problems of marginal-cost pricing of a regulated monopolist is average cost pricing. In this model, the monopolist is allowed to price its production at average total cost. How does average-cost pricing differ from marginal-cost pricing? Does this solution maximize social well-being?

Accepted Answer

Average-cost pricing always gu

Question 3

For a monopoly firm,at the level of output for which marginal revenue equals zero,what also occurs

Accepted Answer

A) Average revenue is zero. 
B) Profit is maximized. 
C) Total revenue is maximized. 
D) Marginal cost is zero. 
A) Average revenue is zero. 
B) Profit is maximized. 
C) Total revenue is maximized. 
D) Marginal cost is zero.

Question 4

Some companies merge in order to lower costs through efficient joint production.

Accepted Answer

A) True 
 B)False

Question 5

Figure 15-2
The figure below reflects the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-2.Which curve depicts the marginal-cost curve for a monopoly firm

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 6

When does a government-created monopoly arise

Accepted Answer

A) when government spending in a certain industry gives rise to monopoly power 
B) when the government exercises its market control by encouraging competition among sellers 
C) when the government gives a firm the exclusive right to sell some good or service 
D) when the government imposes a sales tax so high competitors are discouraged from entry 
A) when government spending in a certain industry gives rise to monopoly power 
B) when the government exercises its market control by encouraging competition among sellers 
C) when the government gives a firm the exclusive right to sell some good or service 
D) when the government imposes a sales tax so high competitors are discouraged from entry

Question 7

Which consideration is the most likely reason the city council in Toronto consistently denies licences to independent vehicle drivers selling rides to the public

Accepted Answer

A) Allowing the vehicles to operate would reduce social welfare. 
B) The vehicle drivers engage in price discrimination. 
C) Allowing the vehicles to operate would allow them to unfairly take advantage of poor residents. 
D) The vehicles are a threat to the public transit monopoly. 
A) Allowing the vehicles to operate would reduce social welfare. 
B) The vehicle drivers engage in price discrimination. 
C) Allowing the vehicles to operate would allow them to unfairly take advantage of poor residents. 
D) The vehicles are a threat to the public transit monopoly.

Question 8

Suppose during the tsunami in 2011,Kureha Corporation suffered significant damage.As a result,smartphone makers have to look for other sources for the supply of polymer.In this case,what will happen to Kureha Corporation

Accepted Answer

A) It has less incentive to advertise than it would otherwise have. 
B) It has less market power than it would otherwise have. 
C) It has more control over the price of polymer than it would otherwise have. 
D) It has higher profits than it would otherwise have. 
A) It has less incentive to advertise than it would otherwise have. 
B) It has less market power than it would otherwise have. 
C) It has more control over the price of polymer than it would otherwise have. 
D) It has higher profits than it would otherwise have.

Question 9

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Accepted Answer

A) True 
 B)False

Question 10

When the government creates a monopoly,what may the social loss include

Accepted Answer

A) falling marginal cost 
B) the cost of maintaining its monopoly position 
C) high monopoly profits 
D) lost producer surplus 
A) falling marginal cost 
B) the cost of maintaining its monopoly position 
C) high monopoly profits 
D) lost producer surplus

Question 11

A monopolist faces market demand given by P = 300 - 2Q.For this market,MR = 300 - 4Q and MC = 40.What quantity of output will the monopolist produce in order to maximize profits

Accepted Answer

A) 30 
B) 65 
C) 120 
D) 180 
A) 30 
B) 65 
C) 120 
D) 180

Question 12

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

Accepted Answer

Government policymakers can tr

Question 13

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Accepted Answer

A) True 
 B)False

Question 14

For a monopoly,marginal revenue is often greater than the price it charges for the good.

Accepted Answer

A) True 
 B)False

Question 15

What is the defining characteristic of a natural monopoly

Accepted Answer

A) constant marginal cost over the relevant range of output 
B) constant average fixed costs over the relevant range of output 
C) constant returns to scale over the relevant range of output 
D) economies of scale over the relevant range of output 
A) constant marginal cost over the relevant range of output 
B) constant average fixed costs over the relevant range of output 
C) constant returns to scale over the relevant range of output 
D) economies of scale over the relevant range of output

Question 16

At what level of output will a profit-maximizing monopolist produce

Accepted Answer

A) the level of output at which price is equal to average total cost 
B) the level of output at which average revenue is equal to marginal cost 
C) the level of output at which marginal revenue is equal to marginal cost 
D) the level of output at which total revenue is equal to opportunity cost 
A) the level of output at which price is equal to average total cost 
B) the level of output at which average revenue is equal to marginal cost 
C) the level of output at which marginal revenue is equal to marginal cost 
D) the level of output at which total revenue is equal to opportunity cost

Question 17

Suppose a certain firm has a monopoly on electricity.To sell the 100th unit of electricity,what must the firm experience

Accepted Answer

A) less marginal revenue on the 100th unit of electricity than it experienced on the 99th unit 
B) more average revenue on the 100th unit of electricity than it experienced on the 99th unit 
C) less marginal cost on the 100 units of electricity than it experienced on the first 99 units 
D) more marginal revenue on the 100th unit of electricity than it experienced on the 99th unit 
A) less marginal revenue on the 100th unit of electricity than it experienced on the 99th unit 
B) more average revenue on the 100th unit of electricity than it experienced on the 99th unit 
C) less marginal cost on the 100 units of electricity than it experienced on the first 99 units 
D) more marginal revenue on the 100th unit of electricity than it experienced on the 99th unit

Question 18

What is the amount that producers receive for a good minus their costs of producing it

Accepted Answer

A) quantity supplied 
B) supply price 
C) consumer surplus 
D) producer surplus 
A) quantity supplied 
B) supply price 
C) consumer surplus 
D) producer surplus

Question 19

For a monopolist,how do we determine the sign of the marginal-revenue curve

Accepted Answer

A) It is positive when the demand effect is greater than the supply effect. 
B) It is positive when the monopoly effect is greater than the competitive effect. 
C) It is negative when the price effect is greater than the output effect. 
D) It is negative when the output effect is greater than the price effect. 
A) It is positive when the demand effect is greater than the supply effect. 
B) It is positive when the monopoly effect is greater than the competitive effect. 
C) It is negative when the price effect is greater than the output effect. 
D) It is negative when the output effect is greater than the price effect.

Question 20

The amount of power that a monopoly has is a function of whether there are close substitutes for its product.

Accepted Answer

A) True 
 B)False

Exam 15: Monopoly

If many good substitutes exist for a competitive firm's product,what type of demand curve does it face

For a monopoly firm,at the level of output for which marginal revenue equals zero,what also occurs

Some companies merge in order to lower costs through efficient joint production.

Figure 15-2 The figure below reflects the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.Which curve depicts the marginal-cost curve for a monopoly firm

When does a government-created monopoly arise

Which consideration is the most likely reason the city council in Toronto consistently denies licences to independent vehicle drivers selling rides to the public

Suppose during the tsunami in 2011,Kureha Corporation suffered significant damage.As a result,smartphone makers have to look for other sources for the supply of polymer.In this case,what will happen to Kureha Corporation

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

When the government creates a monopoly,what may the social loss include

A monopolist faces market demand given by P = 300 - 2Q.For this market,MR = 300 - 4Q and MC = 40.What quantity of output will the monopolist produce in order to maximize profits

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

Average revenue for a monopoly is the total revenue divided by the quantity produced.

For a monopoly,marginal revenue is often greater than the price it charges for the good.

What is the defining characteristic of a natural monopoly

At what level of output will a profit-maximizing monopolist produce

Suppose a certain firm has a monopoly on electricity.To sell the 100th unit of electricity,what must the firm experience

What is the amount that producers receive for a good minus their costs of producing it

For a monopolist,how do we determine the sign of the marginal-revenue curve

The amount of power that a monopoly has is a function of whether there are close substitutes for its product.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters