Question 1

Use the figure below to answer the following questions.
   
Figure 13.3.1
-Refer to Figure 13.3.1. The efficient quantity is

Accepted Answer

A) 20 units. 
B) 40 units. 
C) 60 units. 
D) 80 units. 
E) zero units. 
A) 20 units. 
B) 40 units. 
C) 60 units. 
D) 80 units. 
E) zero units.

Question 2

The pursuit of wealth by capturing economic rent

Accepted Answer

A) is rent seeking. 
B) is illegal in Canada. 
C) is price discrimination. 
D) creates a legal monopoly. 
E) creates a natural monopoly. 
A) is rent seeking. 
B) is illegal in Canada. 
C) is price discrimination. 
D) creates a legal monopoly. 
E) creates a natural monopoly.

Question 3

Methods of rent seeking include which of the following?
I. Buying a monopoly
II. Creating a monopoly
III. Price discrimination

Accepted Answer

A) I and II 
B) I and III 
C) II and III 
D) III only 
E) II only 
A) I and II 
B) I and III 
C) II and III 
D) III only 
E) II only

Question 4

A monopolist under marginal cost pricing has an incentive to

Accepted Answer

A) inflate costs. 
B) produce more than the efficient quantity of output. 
C) produce less than the efficient quantity of output. 
D) maximize consumer surplus. 
E) produce the efficient quantity of output. 
A) inflate costs. 
B) produce more than the efficient quantity of output. 
C) produce less than the efficient quantity of output. 
D) maximize consumer surplus. 
E) produce the efficient quantity of output.

Question 5

Use the figure below to answer the following questions.
   
Figure 13.3.3
-Consider the market demand curve in Figure 13.3.3. If the market is perfectly competitive, which area indicates consumer surplus?

Accepted Answer

A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD 
A) AEK 
B) DHK 
C) DIK 
D) DIH 
E) ACD

Question 6

If a monopolist can perfectly price discriminate, then

Accepted Answer

A) price equals average cost for each unit sold. 
B) price equals marginal cost for each unit sold. 
C) price equals marginal cost for the last unit sold. 
D) the firm can ignore the marginal cost curve. 
E) price is greater than marginal revenue for each unit sold. 
A) price equals average cost for each unit sold. 
B) price equals marginal cost for each unit sold. 
C) price equals marginal cost for the last unit sold. 
D) the firm can ignore the marginal cost curve. 
E) price is greater than marginal revenue for each unit sold.

Question 7

A perfect price-discriminating monopoly

Accepted Answer

A) has a demand curve that is also its marginal revenue curve. 
B) maximizes total revenue. 
C) is inefficient. 
D) will produce the quantity at which the marginal cost curve intersects its demand curve. 
E) both A and D 
A) has a demand curve that is also its marginal revenue curve. 
B) maximizes total revenue. 
C) is inefficient. 
D) will produce the quantity at which the marginal cost curve intersects its demand curve. 
E) both A and D

Question 8

One difference between perfectly competitive markets and a single-price monopoly is that

Accepted Answer

A) marginal revenue equals marginal cost for perfectly competitive firms, but not for single-price monopolists. 
B) marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists. 
C) price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms. 
D) marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. 
E) marginal revenue equals marginal cost for single-price monopolists but not for perfectly competitive firms. 
A) marginal revenue equals marginal cost for perfectly competitive firms, but not for single-price monopolists. 
B) marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists. 
C) price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms. 
D) marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. 
E) marginal revenue equals marginal cost for single-price monopolists but not for perfectly competitive firms.

Question 9

Use the figure below to answer the following questions.
   
Figure 13.3.2
-Consider Figure 13.3.2. Consider a perfectly competitive market. If the light grey area shows the consumer surplus, and the dark grey area shows the producer surplus, which graph correctly represents this market?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d) 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) (b)and (d)

Question 10

Use the figure below to answer the following questions.
   
Figure 13.5.2
-Consider the natural monopoly depicted in Figure 13.5.2. If a regulatory agency sets a price just sufficient for the firm to make zero economic profit, what output will it produce?

Accepted Answer

A) Q₄ 
B) Q₀ 
C) Q₁ 
D) Q₂ 
E) Q₃ 
A) Q₄ 
B) Q₀ 
C) Q₁ 
D) Q₂ 
E) Q₃

Question 11

The creation of a monopoly results in gains to

Accepted Answer

A) producers at no expense to consumers. 
B) consumers at no expense to producers. 
C) producers at the expense of consumers. 
D) consumers at the expense of producers. 
E) producers and consumers at the expense of the government. 
A) producers at no expense to consumers. 
B) consumers at no expense to producers. 
C) producers at the expense of consumers. 
D) consumers at the expense of producers. 
E) producers and consumers at the expense of the government.

Question 12

An efficient use of resources occurs when

Accepted Answer

A) a deadweight loss arises. 
B) total social benefit from a good equals its total social cost. 
C) producer surplus is eliminated. 
D) consumer surplus is maximized. 
E) a monopoly practices perfect price discrimination. 
A) a deadweight loss arises. 
B) total social benefit from a good equals its total social cost. 
C) producer surplus is eliminated. 
D) consumer surplus is maximized. 
E) a monopoly practices perfect price discrimination.

Question 13

Use the figure below to answer the following questions.
   
Figure 13.4.2
-Refer to Figure 13.4.2. Assume this monopolist practises perfect price discrimination. What is total revenue?

Accepted Answer

A) $110 
B) $210 
C) $310 
D) $120 
E) $105 
A) $110 
B) $210 
C) $310 
D) $120 
E) $105

Question 14

Use the figure below to answer the following questions.
   
Figure 13.2.3
-Refer to Figure 13.2.3. Assume this firm is a single-price monopoly. What is the profit-maximizing price to charge for the tickets?

Accepted Answer

A) $5.00 
B) $4.00 
C) $3.00 
D) $2.00 
E) $3.50 
A) $5.00 
B) $4.00 
C) $3.00 
D) $2.00 
E) $3.50

Question 15

Which of the following markets will have the largest deadweight loss?

Accepted Answer

A) a single-price monopoly 
B) a perfectly competitive market 
C) a perfectly price discriminating monopoly 
D) both B and C 
E) both A and C 
A) a single-price monopoly 
B) a perfectly competitive market 
C) a perfectly price discriminating monopoly 
D) both B and C 
E) both A and C

Question 16

A monopoly is a market with a single firm that

Accepted Answer

A) produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B) purchases its factors of production from only one supplier because of a barrier preventing it from buying from other suppliers. 
C) produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D) cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price. 
E) produces its good or service using labour from a single source, which is usually a union. 
A) produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B) purchases its factors of production from only one supplier because of a barrier preventing it from buying from other suppliers. 
C) produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D) cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price. 
E) produces its good or service using labour from a single source, which is usually a union.

Question 17

If marginal revenue equals zero, then demand at this level of output is

Accepted Answer

A) perfectly inelastic. 
B) inelastic. 
C) unit elastic. 
D) elastic. 
E) perfectly elastic. 
A) perfectly inelastic. 
B) inelastic. 
C) unit elastic. 
D) elastic. 
E) perfectly elastic.

Question 18

For the regulated natural monopoly, an average cost pricing rule sets price equal to

Accepted Answer

A) marginal cost. 
B) total fixed cost. 
C) average variable cost. 
D) average fixed cost. 
E) average total cost. 
A) marginal cost. 
B) total fixed cost. 
C) average variable cost. 
D) average fixed cost. 
E) average total cost.

Exam 13: Monopoly

Use the figure below to answer the following questions. Figure 13.3.1 -Refer to Figure 13.3.1. The efficient quantity is

The pursuit of wealth by capturing economic rent

Methods of rent seeking include which of the following? I. Buying a monopoly II. Creating a monopoly III. Price discrimination

A monopolist under marginal cost pricing has an incentive to

Use the figure below to answer the following questions. Figure 13.3.3 -Consider the market demand curve in Figure 13.3.3. If the market is perfectly competitive, which area indicates consumer surplus?

If a monopolist can perfectly price discriminate, then

A perfect price-discriminating monopoly

One difference between perfectly competitive markets and a single-price monopoly is that

Use the figure below to answer the following questions. Figure 13.3.2 -Consider Figure 13.3.2. Consider a perfectly competitive market. If the light grey area shows the consumer surplus, and the dark grey area shows the producer surplus, which graph correctly represents this market?

Use the figure below to answer the following questions. Figure 13.5.2 -Consider the natural monopoly depicted in Figure 13.5.2. If a regulatory agency sets a price just sufficient for the firm to make zero economic profit, what output will it produce?

The creation of a monopoly results in gains to

An efficient use of resources occurs when

Use the figure below to answer the following questions. Figure 13.4.2 -Refer to Figure 13.4.2. Assume this monopolist practises perfect price discrimination. What is total revenue?

Use the figure below to answer the following questions. Figure 13.2.3 -Refer to Figure 13.2.3. Assume this firm is a single-price monopoly. What is the profit-maximizing price to charge for the tickets?

Which of the following markets will have the largest deadweight loss?

A monopoly is a market with a single firm that

If marginal revenue equals zero, then demand at this level of output is

For the regulated natural monopoly, an average cost pricing rule sets price equal to

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters