Question 1

If a monopoly can perfectly price discriminate, then its marginal revenue curve will be

Accepted Answer

A) the same as its demand curve. 
B) the same as its supply curve. 
C) the same as its marginal cost curve. 
D) a vertical line at the profit-maximizing quantity of output. 
E) undefined because it does not exist. 
A) the same as its demand curve. 
B) the same as its supply curve. 
C) the same as its marginal cost curve. 
D) a vertical line at the profit-maximizing quantity of output. 
E) undefined because it does not exist.

Question 2

Assume someone organizes all farms in the nation into a single-price monopoly. What is the monopoly's marginal revenue curve?

Accepted Answer

A) It is a horizontal line at the competitive industry's price. 
B) It is a line that lies below the new monopoly's demand curve. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is identical to the demand curve for the monopolist's output. 
E) It is a line that lies above the new monopoly's demand curve. 
A) It is a horizontal line at the competitive industry's price. 
B) It is a line that lies below the new monopoly's demand curve. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is identical to the demand curve for the monopolist's output. 
E) It is a line that lies above the new monopoly's demand curve.

Question 3

When a natural monopoly is regulated using a marginal cost pricing rule, what can you say about the firm's profit and the market's efficiency?

Accepted Answer

Using a marginal cost pricing

Question 4

Which of the following can be a barrier to entry?
I. ownership of a necessary input
Ii. requiring a government license
Iii. large diseconomies of scale

Accepted Answer

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

Question 5

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The deadweight loss when the market has a monopoly producer is

Accepted Answer

A) ace. 
B) abf. 
C) bcd. 
D) bcef. 
E) acd. 
A) ace. 
B) abf. 
C) bcd. 
D) bcef. 
E) acd.

Question 6

If a monopoly engages in rent seeking, i. its average total cost curve is lower than otherwise.
Ii. it might or might not make an economic profit depending on how many other competitors also are rent seeking.
Iii. it necessarily incurs an economic loss.

Accepted Answer

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

Question 7

Suppose a monopoly can sell 10 units of output for $21. In order to sell 11 units of output, the price must fall to $20. What is the marginal revenue of the 11th unit?

Accepted Answer

A) $41 
B) $20 
C) $10 
D) $1 
E) $220 
A) $41 
B) $20 
C) $10 
D) $1 
E) $220

Question 8

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} \
\hline 1 & 8 \
\hline 2 & 7 \
\hline 3 & 6 \
\hline 4 & 5 \
\hline 5 & 4 \
\hline 6 & 3 \
\hline
\end{array}$$
-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 2 to 3 units?

Accepted Answer

A) $18 
B) $4 
C) $7 
D) $6 
A) $18 
B) $4 
C) $7 
D) $6

Question 9

A single-price monopoly can sell 2 units for $8.50 per unit. In order to sell 3 units, the price must be $8.00 per unit. The marginal revenue from selling the third unit is

Accepted Answer

A) $24.00. 
B) $8.50. 
C) $7.00. 
D) $6.50. 
E) $17.00. 
A) $24.00. 
B) $8.50. 
C) $7.00. 
D) $6.50. 
E) $17.00.

Question 10

Which of the following is always true for a single-price monopolist?

Accepted Answer

A) P > MR B) P < MR C) P = MR D) P = elasticity of demand E) None of the above answers is correct because none of them is always true. A) P > MR B) P < MR C) P = MR D) P = elasticity of demand E) None of the above answers is correct because none of them is always true.

Question 11

Monopolies ________ fair and ________ efficient.

Accepted Answer

A) are always; are not 
B) might be; are always 
C) might be; might be 
D) are always; are always 
E) are never; are always 
A) are always; are not 
B) might be; are always 
C) might be; might be 
D) are always; are always 
E) are never; are always

Question 12

Patents

Accepted Answer

A) are a legal barrier to entry. 
B) remove legal barriers to entry. 
C) create economies of scale. 
D) decrease the incentive to innovate. 
E) are prohibited in the United States. 
A) are a legal barrier to entry. 
B) remove legal barriers to entry. 
C) create economies of scale. 
D) decrease the incentive to innovate. 
E) are prohibited in the United States.

Question 13

The process of price cap regulation includes which of the following?
I. a price ceiling.
Ii. marginal cost pricing.
Iii. average cost pricing

Accepted Answer

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

Question 14

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a monopoly producer of pillows stuffed with parrot feathers. When the pillow market is a monopoly, the price of a pillow is ________ and if the pillow market is perfectly competitive, the price of a pillow is ________.

Accepted Answer

A) $40; $20 
B) $70; $60 
C) $40; $60 
D) $60; $40 
E) $100; $40 
A) $40; $20 
B) $70; $60 
C) $40; $60 
D) $60; $40 
E) $100; $40

Question 15

The makers of the movie Titanic have some monopoly power over this film because the

Accepted Answer

A) movie is patented. 
B) name Titanic is trademarked. 
C) movie is protected by copyright law. 
D) government has issued the maker of this movie a public franchise. 
E) owner never price discriminated in marketing the movie. 
A) movie is patented. 
B) name Titanic is trademarked. 
C) movie is protected by copyright law. 
D) government has issued the maker of this movie a public franchise. 
E) owner never price discriminated in marketing the movie.

Question 16

Under a marginal cost pricing rule, a natural monopoly

Accepted Answer

A) makes a reasonable profit. 
B) makes an economic profit. 
C) earns accounting profits, but breaks even in economic terms. 
D) incurs an economic loss. 
E) makes a normal profit but it cannot be determined whether or not it makes an accounting profit. 
A) makes a reasonable profit. 
B) makes an economic profit. 
C) earns accounting profits, but breaks even in economic terms. 
D) incurs an economic loss. 
E) makes a normal profit but it cannot be determined whether or not it makes an accounting profit.

Question 17

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot Pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price per pillow is

Accepted Answer

A) $70. 
B) $60. 
C) $40. 
D) $100. 
E) $30. 
A) $70. 
B) $60. 
C) $40. 
D) $100. 
E) $30.

Question 18

When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?

Accepted Answer

Using an average cost pricing rule, the

Question 19

To maximize its profit, a single-price monopoly produces the quantity at which

Accepted Answer

A) the difference between marginal revenue and marginal cost is as large as possible. 
B) marginal revenue equals marginal cost. 
C) average total cost is at its minimum. 
D) the marginal cost curve intersects the demand curve. 
E) the marginal revenue curve intersects the horizontal axis. 
A) the difference between marginal revenue and marginal cost is as large as possible. 
B) marginal revenue equals marginal cost. 
C) average total cost is at its minimum. 
D) the marginal cost curve intersects the demand curve. 
E) the marginal revenue curve intersects the horizontal axis.

Question 20

The social interest theory of regulation is defined as the

Accepted Answer

A) use of regulations to maximize firms' profits. 
B) use of regulations to assure an efficient use of resources. 
C) removal of regulations on business activities. 
D) implementation and removal of regulations on the cable TV industry. 
E) use of rate of return regulation. 
A) use of regulations to maximize firms' profits. 
B) use of regulations to assure an efficient use of resources. 
C) removal of regulations on business activities. 
D) implementation and removal of regulations on the cable TV industry. 
E) use of rate of return regulation.

If a monopoly can perfectly price discriminate, then its marginal revenue curve will be

Assume someone organizes all farms in the nation into a single-price monopoly. What is the monopoly's marginal revenue curve?

When a natural monopoly is regulated using a marginal cost pricing rule, what can you say about the firm's profit and the market's efficiency?

Which of the following can be a barrier to entry? I. ownership of a necessary input Ii. requiring a government license Iii. large diseconomies of scale

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The deadweight loss when the market has a monopoly producer is

If a monopoly engages in rent seeking, i. its average total cost curve is lower than otherwise. Ii. it might or might not make an economic profit depending on how many other competitors also are rent seeking. Iii. it necessarily incurs an economic loss.

Suppose a monopoly can sell 10 units of output for $21. In order to sell 11 units of output, the price must fall to $20. What is the marginal revenue of the 11th unit?

Quantity (units) Price (dollars per unit) 1 8 2 7 3 6 4 5 5 4 6 3 -The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 2 to 3 units?

A single-price monopoly can sell 2 units for $8.50 per unit. In order to sell 3 units, the price must be $8.00 per unit. The marginal revenue from selling the third unit is

Which of the following is always true for a single-price monopolist?

Monopolies fair and efficient.

Patents

The process of price cap regulation includes which of the following? I. a price ceiling. Ii. marginal cost pricing. Iii. average cost pricing

The makers of the movie Titanic have some monopoly power over this film because the

Under a marginal cost pricing rule, a natural monopoly

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot Pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price per pillow is

When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?

To maximize its profit, a single-price monopoly produces the quantity at which

The social interest theory of regulation is defined as the

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 12: Monopoly

If a monopoly can perfectly price discriminate, then its marginal revenue curve will be

Assume someone organizes all farms in the nation into a single-price monopoly. What is the monopoly's marginal revenue curve?

When a natural monopoly is regulated using a marginal cost pricing rule, what can you say about the firm's profit and the market's efficiency?

Which of the following can be a barrier to entry? I. ownership of a necessary input Ii. requiring a government license Iii. large diseconomies of scale

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The deadweight loss when the market has a monopoly producer is

If a monopoly engages in rent seeking, i. its average total cost curve is lower than otherwise. Ii. it might or might not make an economic profit depending on how many other competitors also are rent seeking. Iii. it necessarily incurs an economic loss.

Suppose a monopoly can sell 10 units of output for $21. In order to sell 11 units of output, the price must fall to $20. What is the marginal revenue of the 11th unit?

Quantity (units) Price (dollars per unit) 1 8 2 7 3 6 4 5 5 4 6 3 -The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 2 to 3 units?

A single-price monopoly can sell 2 units for $8.50 per unit. In order to sell 3 units, the price must be $8.00 per unit. The marginal revenue from selling the third unit is

Which of the following is always true for a single-price monopolist?

Monopolies ________ fair and ________ efficient.

Patents

The process of price cap regulation includes which of the following? I. a price ceiling. Ii. marginal cost pricing. Iii. average cost pricing

The makers of the movie Titanic have some monopoly power over this film because the

Under a marginal cost pricing rule, a natural monopoly

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot Pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price per pillow is

When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?

To maximize its profit, a single-price monopoly produces the quantity at which

The social interest theory of regulation is defined as the

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Monopolies fair and efficient.