Question 1

A monopolist's cost curves may shift up because of

Accepted Answer

A) advertising expenditure. 
B) bureaucratic inefficiencies. 
C) coordination problems. 
D) All of the above are correct. 
A) advertising expenditure. 
B) bureaucratic inefficiencies. 
C) coordination problems. 
D) All of the above are correct.

Question 2

Only government restrictions serve as entry barriers.

Accepted Answer

A) True 
 B)False

Question 3

Since a monopolist has a unique product, it makes no sense for the firm to advertise.

Accepted Answer

A) True 
 B)False

Question 4

Wendy retails motor homes, which she buys for a sum that does not vary with the number she purchases from the manufacturer.She can sell eleven per week at $40,000.If she limits sales to ten, she can charge $41,000 each.She will sell eleven per week if the cost of each vehicle is no more than

Accepted Answer

A) $20,000. 
B) $30,000. 
C) $40,000. 
D) $41,000. 
A) $20,000. 
B) $30,000. 
C) $40,000. 
D) $41,000.

Question 5

The U.S.Postal Service enjoys a monopoly position because of patent rights.

Accepted Answer

A) True 
 B)False

Question 6

It is true in monopoly pricing that the

Accepted Answer

A) sky is not the limit. 
B) market cannot impose a price on a monopolist. 
C) monopolist is a price maker. 
D) All of the above are correct. 
A) sky is not the limit. 
B) market cannot impose a price on a monopolist. 
C) monopolist is a price maker. 
D) All of the above are correct.

Question 7

Figure 11-4
  
-Physicians have two types of patients: private patients who pay directly or with insurance, and Medicaid patients whose care is paid for by the state.Physicians must lower prices to attract more private patients, but they can add unlimited Medicaid patients at a constant price.The situation facing Dr.Casey is depicted in Figure 11-4.Units of medical service (say, number of patients × number of visits) are measured on the horizontal axis.How many units of medical service will Dr.Casey deliver?

Accepted Answer

A) OA 
B) OB 
C) OC 
D) OD 
A) OA 
B) OB 
C) OC 
D) OD

Question 8

A monopolist's profit per unit is shown by the difference between price and marginal cost per unit.

Accepted Answer

A) True 
 B)False

Question 9

A monopoly restricts output and charges a higher price than other types of firms.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following observations concerning price discrimination is true?

Accepted Answer

A) It only occurs in monopolies. 
B) It is easier for a monopolist than for a firm that is affected by competition. 
C) It means that sales to all customers are equally profitable. 
D) It is considered as a bad business practice under all circumstance. 
A) It only occurs in monopolies. 
B) It is easier for a monopolist than for a firm that is affected by competition. 
C) It means that sales to all customers are equally profitable. 
D) It is considered as a bad business practice under all circumstance.

Question 11

Price discrimination is always illegal.

Accepted Answer

A) True 
 B)False

Question 12

Price discrimination only occurs under monopoly.

Accepted Answer

A) True 
 B)False

Question 13

Explain why a monopolist does not have a supply curve.

Accepted Answer

Any firm, including a monopolist, has co

Question 14

Inefficient resource allocation is a major problem with monopolies.

Accepted Answer

A) True 
 B)False

Question 15

In the long run under monopoly,

Accepted Answer

A) the MC curve will lie to the left of the output at which AC and AR meet. 
B) MC = MR = P. 
C) MC = MR = AR. 
D) the MC curve will lie to the right of the output at which AC and AR meet. 
A) the MC curve will lie to the left of the output at which AC and AR meet. 
B) MC = MR = P. 
C) MC = MR = AR. 
D) the MC curve will lie to the right of the output at which AC and AR meet.

Question 16

Table 11-1  
-Table 11-1 shows demand and total cost schedules for the monopolist Monopoliteria.Monopoliteria's profit-maximizing price per unit in dollars is

Accepted Answer

A) 1. 
B) 3. 
C) 5. 
D) 4. 
E) 6. 
A) 1. 
B) 3. 
C) 5. 
D) 4. 
E) 6.

Question 17

Figure 11-1
  
-The Red Cross is virtually the only operator of blood banks in the United States.In Figure 11-1 are the demand and cost curves facing the Red Cross blood bank.If the Red Cross were to set price and quantity at the level that it would obtain in the long run in a competitive industry, how much blood would it sell?

Accepted Answer

A) OA 
B) OB 
C) OD 
D) OC 
A) OA 
B) OB 
C) OD 
D) OC

Question 18

Why is the advent of monopoly likely to shift cost curves?

Accepted Answer

The advent of a monopoly may shift the a

Question 19

Why does perfect competition shun advertising? Does advertising benefit a monopoly?

Accepted Answer

In perfect competition, advertising expe

Question 20

For a monopoly, MC = MR < P so that MC < MU.

Accepted Answer

A) True 
 B)False

Exam 11: Monopoly

A monopolist's cost curves may shift up because of

Only government restrictions serve as entry barriers.

Since a monopolist has a unique product, it makes no sense for the firm to advertise.

Wendy retails motor homes, which she buys for a sum that does not vary with the number she purchases from the manufacturer.She can sell eleven per week at $40,000.If she limits sales to ten, she can charge $41,000 each.She will sell eleven per week if the cost of each vehicle is no more than

The U.S.Postal Service enjoys a monopoly position because of patent rights.

It is true in monopoly pricing that the

A monopolist's profit per unit is shown by the difference between price and marginal cost per unit.

A monopoly restricts output and charges a higher price than other types of firms.

Which of the following observations concerning price discrimination is true?

Price discrimination is always illegal.

Price discrimination only occurs under monopoly.

Explain why a monopolist does not have a supply curve.

Inefficient resource allocation is a major problem with monopolies.

In the long run under monopoly,

Table 11-1 -Table 11-1 shows demand and total cost schedules for the monopolist Monopoliteria.Monopoliteria's profit-maximizing price per unit in dollars is

Why is the advent of monopoly likely to shift cost curves?

Why does perfect competition shun advertising? Does advertising benefit a monopoly?

For a monopoly, MC = MR < P so that MC < MU.

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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