Question 1

For a natural monopoly to cover its total cost, its price must equal its

Accepted Answer

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

Question 2

Which of the following is a legal barrier to entry?
i. public franchise
ii. government license
iii. patent

Accepted Answer

A) iii only 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) i and ii 
A) iii only 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) i and ii

Question 3

Which of the following is NOT a requirement for a firm to be able to price discriminate?

Accepted Answer

A) monopoly power 
B) groups of customers with different willingness to pay for the good 
C) economies of scale 
D) ability to keep the members of different customer groups separate 
E) ability to prevent resales of the product by customers 
A) monopoly power 
B) groups of customers with different willingness to pay for the good 
C) economies of scale 
D) ability to keep the members of different customer groups separate 
E) ability to prevent resales of the product by customers

Question 4

To encourage invention and innovation, the government provides

Accepted Answer

A) patents. 
B) public franchises. 
C) government licenses. 
D) natural monopolies. 
E) easily obtained ownership barriers to entry. 
A) patents. 
B) public franchises. 
C) government licenses. 
D) natural monopolies. 
E) easily obtained ownership barriers to entry.

Question 5

The total revenue test using the price elasticity of demand

Accepted Answer

A) explains why monopolies will only operate on the elastic portion of their demand curve. 
B) explains why monopolies will only operate on the inelastic portion of their demand curves. 
C) demonstrates why a monopoly can earn an economic profit in the long run. 
D) determines whether a monopoly can perfectly price discriminate or not. 
E) cannot be used for a price discriminating monopoly. 
A) explains why monopolies will only operate on the elastic portion of their demand curve. 
B) explains why monopolies will only operate on the inelastic portion of their demand curves. 
C) demonstrates why a monopoly can earn an economic profit in the long run. 
D) determines whether a monopoly can perfectly price discriminate or not. 
E) cannot be used for a price discriminating monopoly.

Question 6

Which of the following is true regarding price discrimination?
I∙It converts consumer surplus to economic profit.
Ii∙A price discriminator must be a monopoly.
Iii∙To be able to price discriminate, the firm must be able to identify different types of buyers.

Accepted Answer

A) i and ii 
B) i and iii 
C) ii and iii 
D) ii only 
E) i, ii, and iii 
A) i and ii 
B) i and iii 
C) ii and iii 
D) ii only 
E) i, ii, and iii

Question 7

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

Accepted Answer

A) a natural monopoly. 
B) a marginal cost pricing rule. 
C) an average cost pricing rule. 
D) the capture theory of regulation. 
E) the social interest theory of regulation. 
A) a natural monopoly. 
B) a marginal cost pricing rule. 
C) an average cost pricing rule. 
D) the capture theory of regulation. 
E) the social interest theory of regulation.

Question 8

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is correct.A sin

Question 9

A natural monopoly that is regulated to set price equal to marginal cost

Accepted Answer

A) makes an economic profit. 
B) makes zero economic profit. 
C) incurs an economic loss. 
D) could make an economic loss, an economic profit, or zero economic profit. 
E) makes zero normal profit. 
A) makes an economic profit. 
B) makes zero economic profit. 
C) incurs an economic loss. 
D) could make an economic loss, an economic profit, or zero economic profit. 
E) makes zero normal profit.

Question 10

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

Accepted Answer

A) P = ATC. B) P > ATC. C) P = MC. D) P > MC. E) P < MC. A) P = ATC. B) P > ATC. C) P = MC. D) P > MC. E) P < MC.

Question 11

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

Accepted Answer

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

Question 12

Which of the following is an example of a natural monopoly?

Accepted Answer

A) the trademark protecting Gatorade 
B) the talents of Tom Hanks 
C) the local water company 
D) the patent on an Intel processor 
E) Debeers' ownership of a large fraction of the world's diamonds 
A) the trademark protecting Gatorade 
B) the talents of Tom Hanks 
C) the local water company 
D) the patent on an Intel processor 
E) Debeers' ownership of a large fraction of the world's diamonds

Question 13

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic, then the Red Sox's marginal revenue is

Accepted Answer

A) negative. 
B) positive. 
C) zero. 
D) maximized. 
E) undefined. 
A) negative. 
B) positive. 
C) zero. 
D) maximized. 
E) undefined.

Question 14

With perfect price discrimination, the quantity of output produced by a monopoly is ________ the quantity produced by a perfectly competitive industry.

Accepted Answer

A) greater than but not equal to 
B) less than 
C) equal to but not greater than 
D) not comparable to 
E) either greater than or equal to 
A) greater than but not equal to 
B) less than 
C) equal to but not greater than 
D) not comparable to 
E) either greater than or equal to

Question 15

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

Accepted Answer

A) $21 
B) $20 
C) $18 
D) $6 
A) $21 
B) $20 
C) $18 
D) $6

Question 16

When a perfectly competitive industry is taken over by a monopoly, some consumer surplus is transferred to the monopolist in the form of

Accepted Answer

A) marginal cost. 
B) economic profit. 
C) deadweight loss. 
D) taxes. 
E) average variable cost. 
A) marginal cost. 
B) economic profit. 
C) deadweight loss. 
D) taxes. 
E) average variable cost.

Question 17

The figure above shows a natural monopoly regulated using a marginal cost pricing rule.
-In the figure above, an

Accepted Answer

A) efficient output results, but the firm incurs a loss per household which must be subsidized in some way. 
B) inefficient output results, though the firm covers its costs. 
C) an efficient output results, though marginal costs exceed average total costs. 
D) an inefficient output results, because the firm cannot cover its costs. 
E) an efficient output results, because consumer surplus is maximized. 
A) efficient output results, but the firm incurs a loss per household which must be subsidized in some way. 
B) inefficient output results, though the firm covers its costs. 
C) an efficient output results, though marginal costs exceed average total costs. 
D) an inefficient output results, because the firm cannot cover its costs. 
E) an efficient output results, because consumer surplus is maximized.

Question 18

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

Accepted Answer

@#IMG-DLM& The compl

Question 19

The above figure shows a market.
-If the market in the figure above is perfectly competitive, consumer surplus is the area ________.

Accepted Answer

A) ABH 
B) BFGH 
C) ACG 
D) BCD 
E) ACE 
A) ABH 
B) BFGH 
C) ACG 
D) BCD 
E) ACE

Question 20

The good produced by a monopoly

Accepted Answer

A) has perfect substitutes. 
B) has no substitutes at all. 
C) has no close substitutes. 
D) can be easily duplicated. 
E) must be unable to be resold. 
A) has perfect substitutes. 
B) has no substitutes at all. 
C) has no close substitutes. 
D) can be easily duplicated. 
E) must be unable to be resold.

For a natural monopoly to cover its total cost, its price must equal its

Which of the following is a legal barrier to entry? i. public franchise ii. government license iii. patent

Which of the following is NOT a requirement for a firm to be able to price discriminate?

To encourage invention and innovation, the government provides

The total revenue test using the price elasticity of demand

Which of the following is true regarding price discrimination? I∙It converts consumer surplus to economic profit. Ii∙A price discriminator must be a monopoly. Iii∙To be able to price discriminate, the firm must be able to identify different types of buyers.

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

A natural monopoly that is regulated to set price equal to marginal cost

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

Which of the following is an example of a natural monopoly?

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic, then the Red Sox's marginal revenue is

With perfect price discrimination, the quantity of output produced by a monopoly is ________ the quantity produced by a perfectly competitive industry.

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

When a perfectly competitive industry is taken over by a monopoly, some consumer surplus is transferred to the monopolist in the form of

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above, an

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

The above figure shows a market. -If the market in the figure above is perfectly competitive, consumer surplus is the area ________.

The good produced by a monopoly

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Monopoly

For a natural monopoly to cover its total cost, its price must equal its

Which of the following is a legal barrier to entry? i. public franchise ii. government license iii. patent

Which of the following is NOT a requirement for a firm to be able to price discriminate?

To encourage invention and innovation, the government provides

The total revenue test using the price elasticity of demand

Which of the following is true regarding price discrimination? I∙It converts consumer surplus to economic profit. Ii∙A price discriminator must be a monopoly. Iii∙To be able to price discriminate, the firm must be able to identify different types of buyers.

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

A natural monopoly that is regulated to set price equal to marginal cost

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

Which of the following is an example of a natural monopoly?

If the Boston Red Sox baseball team is currently charging a ticket price where its demand is inelastic, then the Red Sox's marginal revenue is

With perfect price discrimination, the quantity of output produced by a monopoly is ________ the quantity produced by a perfectly competitive industry.

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

When a perfectly competitive industry is taken over by a monopoly, some consumer surplus is transferred to the monopolist in the form of

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above, an

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

The above figure shows a market. -If the market in the figure above is perfectly competitive, consumer surplus is the area ________.

The good produced by a monopoly

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters