Question 1

What arguments have been advanced in defense of price discrimination?

Accepted Answer

Some would support price discrimination

Question 2

Pure monopoly markets are very common in the real world.

Accepted Answer

A) True 
 B)False

Question 3

Figure 11-7
  
-For the firm in Figure 11-7, an unregulated monopolist, output falls below the efficient level in the short run by how much?

Accepted Answer

A) 50 
B) 75 
C) 35 
D) 100 
A) 50 
B) 75 
C) 35 
D) 100

Question 4

In cases of natural monopolies, society would be better off with many firms competing with each other.

Accepted Answer

A) True 
 B)False

Question 5

The marginal revenue curve for a monopolist is always below the demand curve.

Accepted Answer

A) True 
 B)False

Question 6

A monopolist's cost curves will

Accepted Answer

A) be identical to those of a competitive firm. 
B) be higher than a competitive firm's cost curves. 
C) be peculiar to the individual producer since there is only one. 
D) drop more steeply as output increases. 
A) be identical to those of a competitive firm. 
B) be higher than a competitive firm's cost curves. 
C) be peculiar to the individual producer since there is only one. 
D) drop more steeply as output increases.

Question 7

Perfect Competition is an industry in which there is only one supplier of a product that has no close substitutes.

Accepted Answer

A) True 
 B)False

Question 8

The rule of MC = MR does not apply to a monopolist.

Accepted Answer

A) True 
 B)False

Question 9

Under monopoly

Accepted Answer

A) too small a share of society's resources is used to produce the monopolized commodity. 
B) Adam Smith's invisible hand assures efficient resource allocation. 
C) too large a share of society's resources is being used to produce the monopolized commodity. 
D) MC > MU. 
A) too small a share of society's resources is used to produce the monopolized commodity. 
B) Adam Smith's invisible hand assures efficient resource allocation. 
C) too large a share of society's resources is being used to produce the monopolized commodity. 
D) MC > MU.

Question 10

Monopoly as a market structure leads to

Accepted Answer

A) prices equal to average cost. 
B) quick response to economic change. 
C) prices that equal minimum long-run average cost. 
D) persistent economic profits. 
A) prices equal to average cost. 
B) quick response to economic change. 
C) prices that equal minimum long-run average cost. 
D) persistent economic profits.

Question 11

A monopolist faces a horizontal demand schedule.

Accepted Answer

A) True 
 B)False

Question 12

Pure monopoly is defined as a

Accepted Answer

A) one-firm industry. 
B) market structure in which there are many substitute products. 
C) market structure maintained by entry of many rival firms. 
D) market structure created by special government sanctions. 
A) one-firm industry. 
B) market structure in which there are many substitute products. 
C) market structure maintained by entry of many rival firms. 
D) market structure created by special government sanctions.

Question 13

Which of the following is not a barrier to entry?

Accepted Answer

A) Legal restrictions 
B) Patents 
C) Large sunk costs 
D) Survivor rights 
A) Legal restrictions 
B) Patents 
C) Large sunk costs 
D) Survivor rights

Question 14

A monopolist can earn a positive economic profit, even in the long run.

Accepted Answer

A) True 
 B)False

Question 15

Graphically show why one electric company can operate more cheaply than two.

Accepted Answer

The answer of Graphically show why one electric company can...

Question 16

A natural monopoly would benefit by being broken into many smaller firms.

Accepted Answer

A) True 
 B)False

Question 17

A profit-maximizing monopolist sets

Accepted Answer

A) her price where MC = MR. 
B) her output where MC = MR. 
C) Both a and b are correct. 
D) Neither a nor b is correct. 
A) her price where MC = MR. 
B) her output where MC = MR. 
C) Both a and b are correct. 
D) Neither a nor b is correct.

Question 18

A natural monopoly is one that deliberately erects entry barriers.

Accepted Answer

A) True 
 B)False

Question 19

The demand curve facing a monopolist is

Accepted Answer

A) horizontal at the market price. 
B) identical to the market demand curve for the good. 
C) exactly twice as steep as the market demand curve for the good. 
D) vertical because there are no competitors. 
A) horizontal at the market price. 
B) identical to the market demand curve for the good. 
C) exactly twice as steep as the market demand curve for the good. 
D) vertical because there are no competitors.

Question 20

A market structure in which only one firm has survived because of its economies of scale is called a

Accepted Answer

A) natural monopoly. 
B) planned monopoly. 
C) structural monopoly. 
D) free monopoly. 
A) natural monopoly. 
B) planned monopoly. 
C) structural monopoly. 
D) free monopoly.

Exam 11: Monopoly

What arguments have been advanced in defense of price discrimination?

Pure monopoly markets are very common in the real world.

Figure 11-7 -For the firm in Figure 11-7, an unregulated monopolist, output falls below the efficient level in the short run by how much?

In cases of natural monopolies, society would be better off with many firms competing with each other.

The marginal revenue curve for a monopolist is always below the demand curve.

A monopolist's cost curves will

Perfect Competition is an industry in which there is only one supplier of a product that has no close substitutes.

The rule of MC = MR does not apply to a monopolist.

Under monopoly

Monopoly as a market structure leads to

A monopolist faces a horizontal demand schedule.

Pure monopoly is defined as a

Which of the following is not a barrier to entry?

A monopolist can earn a positive economic profit, even in the long run.

Graphically show why one electric company can operate more cheaply than two.

A natural monopoly would benefit by being broken into many smaller firms.

A profit-maximizing monopolist sets

A natural monopoly is one that deliberately erects entry barriers.

The demand curve facing a monopolist is

A market structure in which only one firm has survived because of its economies of scale is called a

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

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