Question 1

To maximize its profit, a perfectly competitive firm produces so that ________ and a single-price monopoly produces so that ________.

Accepted Answer

A) MR = MC; MR > MC 
B) MR > MC; MR = MC 
C) MR = MC; MR = MC 
D) MR > MC; MR > MC 
E) P = ATC; P = ATC 
A) MR = MC; MR > MC 
B) MR > MC; MR = MC 
C) MR = MC; MR = MC 
D) MR > MC; MR > MC 
E) P = ATC; P = ATC

Question 2

If a firm is able to convert every dollar of consumer surplus to economic profit, the firm has achieved

Accepted Answer

A) discrimination among units of a good. 
B) discrimination between groups of buyers. 
C) perfect price discrimination. 
D) perfect cost minimization. 
E) the normal amount of economic profit. 
A) discrimination among units of a good. 
B) discrimination between groups of buyers. 
C) perfect price discrimination. 
D) perfect cost minimization. 
E) the normal amount of economic profit.

Question 3

Arnie's Airlines is a monopoly airline that is able to price discriminate. If Arnie's decides to price discriminate, then

Accepted Answer

A) Arnie's profit increases. 
B) consumer surplus increases. 
C) Arnie's revenues decrease. 
D) Arnie's sells fewer tickets. 
E) Arnie can no longer set a price that depends upon the buyer's willingness to pay. 
A) Arnie's profit increases. 
B) consumer surplus increases. 
C) Arnie's revenues decrease. 
D) Arnie's sells fewer tickets. 
E) Arnie can no longer set a price that depends upon the buyer's willingness to pay.

Question 4

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 5

The above figure shows a market.
-If the market in the figure above changes from perfectly competitive to a profit-maximizing single-price monopoly, the amount of the gain in producer surplus is the area ________.

Accepted Answer

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

Question 6

The figure above shows a natural monopoly regulated using a marginal cost pricing rule.
-In the figure above, the length of the double sided arrow is the

Accepted Answer

A) consumer surplus. 
B) deadweight loss. 
C) producer surplus. 
D) economic loss per unit. 
E) economic profit. 
A) consumer surplus. 
B) deadweight loss. 
C) producer surplus. 
D) economic loss per unit. 
E) economic profit.

Question 7

A single-price monopoly faces a linear demand curve. If the marginal revenue for the second unit is $20, then the marginal revenue for the

Accepted Answer

A) first unit is less than $20. 
B) third unit is less than $20. 
C) third unit is more than $20. 
D) third unit is also $20. 
E) More information is needed to determine if the marginal revenue for the third unit is more than, less than, or equal to $20. 
A) first unit is less than $20. 
B) third unit is less than $20. 
C) third unit is more than $20. 
D) third unit is also $20. 
E) More information is needed to determine if the marginal revenue for the third unit is more than, less than, or equal to $20.

Question 8

The figure above shows a monopoly's total revenue and total cost curves.
-Using the figure above, which of the following statements are correct?
I. When 3 haircuts are produced, the firm's ATC is $10.
Ii. If the firm charges each customer the same price for a haircut, the price of a haircut is $14.
Iii. The firm's is NOT a perfect competitor.

Accepted Answer

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

Question 9

Which of the following is an example of price discrimination?

Accepted Answer

A) UPS charges more if a package is sent from New York to Hawaii and less if it is sent from New York to New Jersey. 
B) Frank's Furniture shop charges no delivery fee for furniture delivered within Dutchess County but charges $40 delivery fee outside of the county. 
C) Albert pays 25 percent less on prescription drugs because he is a senior citizen. 
D) Only answers A and B are correct. 
E) Answer A, answer B, and answer C are all correct. 
A) UPS charges more if a package is sent from New York to Hawaii and less if it is sent from New York to New Jersey. 
B) Frank's Furniture shop charges no delivery fee for furniture delivered within Dutchess County but charges $40 delivery fee outside of the county. 
C) Albert pays 25 percent less on prescription drugs because he is a senior citizen. 
D) Only answers A and B are correct. 
E) Answer A, answer B, and answer C are all correct.

Question 10

The U.S. Postal Service has a monopoly over first-class mail service because

Accepted Answer

A) the government has granted this agency a public franchise. 
B) stamps are copyrighted. 
C) stamps are trademarked. 
D) stamps are patented. 
E) it owns a vital resource, namely all mailboxes. 
A) the government has granted this agency a public franchise. 
B) stamps are copyrighted. 
C) stamps are trademarked. 
D) stamps are patented. 
E) it owns a vital resource, namely all mailboxes.

Question 11

How do the price, output, consumer surplus, economic profit, and total surplus for a single-price monopoly compare to that of a competitive industry?

Accepted Answer

For the monopoly, price is hig

Question 12

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (dollars per } \
\text { haircut) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (haircuts per day) }
\end{array} \
\hline 5 & 50 \
\hline 10 & 40 \
\hline 15 & 30 \
\hline 20 & 20 \
\hline 25 & 10 \
\hline 30 & 0 \
\hline
\end{array}$$
-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 25th haircut?

Accepted Answer

A) zero 
B) $5.00 
C) $17.50 
D) $50.00 
A) zero 
B) $5.00 
C) $17.50 
D) $50.00

Question 13

The figure above shows a natural monopoly.
-In the figure above, if the firm is regulated using a marginal cost pricing rule, the consumer surplus created is equal to the area of

Accepted Answer

A) ABG. 
B) ACF. 
C) BCFG. 
D) BCE. 
E) None of the above because there is no consumer surplus created. 
A) ABG. 
B) ACF. 
C) BCFG. 
D) BCE. 
E) None of the above because there is no consumer surplus created.

Question 14

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The amount of consumer surplus 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 15

$$\begin{array} { c c } 
\hline \text { Price(dollars) } & \text { Quantity(units) } \
\hline 8 & 1 \
6 & 2 \
5 & 3 \
4 & 4 \
3 & 5 \
\hline
\end{array}$$
-The above table gives the demand schedule for a single-price monopoly. If the marginal cost is $3, the profit maximizing output for the monopoly will be between

Accepted Answer

A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units. 
A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units.

Question 16

The capture theory of regulation is that regulations

Accepted Answer

A) help producers to maximize economic profits. 
B) mean producers suffer losses. 
C) result in diseconomies of scale. 
D) benefit society, not producers. 
E) benefit the regulators, not the producers or the consumers. 
A) help producers to maximize economic profits. 
B) mean producers suffer losses. 
C) result in diseconomies of scale. 
D) benefit society, not producers. 
E) benefit the regulators, not the producers or the consumers.

Question 17

The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the

Accepted Answer

A) social interest theory of regulation. 
B) capture theory of regulation. 
C) Coase theory of regulation. 
D) socially optimal theory of regulation. 
E) predatory theory of regulation. 
A) social interest theory of regulation. 
B) capture theory of regulation. 
C) Coase theory of regulation. 
D) socially optimal theory of regulation. 
E) predatory theory of regulation.

Question 18

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

Accepted Answer

A) Hard cover books are long lasting and paperbacks can rip easily. 
B) Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition. 
C) A hardcover is the publishers' way of rewarding the avid readers. 
D) Publishers are not sure of the demand. 
E) Publishers cannot price discriminate. 
A) Hard cover books are long lasting and paperbacks can rip easily. 
B) Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition. 
C) A hardcover is the publishers' way of rewarding the avid readers. 
D) Publishers are not sure of the demand. 
E) Publishers cannot price discriminate.

Question 19

Describe the three general types of barriers.

Accepted Answer

Barriers to entry can be divided into le

Question 20

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

Accepted Answer

A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost. 
A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost.

To maximize its profit, a perfectly competitive firm produces so that and a single-price monopoly produces so that .

If a firm is able to convert every dollar of consumer surplus to economic profit, the firm has achieved

Arnie's Airlines is a monopoly airline that is able to price discriminate. If Arnie's decides to price discriminate, then

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.

The above figure shows a market. -If the market in the figure above changes from perfectly competitive to a profit-maximizing single-price monopoly, the amount of the gain in producer surplus is the area ________.

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above, the length of the double sided arrow is the

A single-price monopoly faces a linear demand curve. If the marginal revenue for the second unit is $20, then the marginal revenue for the

Which of the following is an example of price discrimination?

The U.S. Postal Service has a monopoly over first-class mail service because

How do the price, output, consumer surplus, economic profit, and total surplus for a single-price monopoly compare to that of a competitive industry?

Price (dollars per haircut) Quantity demanded (haircuts per day) 5 50 10 40 15 30 20 20 25 10 30 0 -Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 25th haircut?

The figure above shows a natural monopoly. -In the figure above, if the firm is regulated using a marginal cost pricing rule, the consumer surplus created is equal to the area of

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The amount of consumer surplus when the market has a monopoly producer is

Price(dollars) Quantity(units) 8 1 6 2 5 3 4 4 3 5 -The above table gives the demand schedule for a single-price monopoly. If the marginal cost is $3, the profit maximizing output for the monopoly will be between

The capture theory of regulation is that regulations

The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

Describe the three general types of barriers.

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

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

To maximize its profit, a perfectly competitive firm produces so that ________ and a single-price monopoly produces so that ________.

If a firm is able to convert every dollar of consumer surplus to economic profit, the firm has achieved

Arnie's Airlines is a monopoly airline that is able to price discriminate. If Arnie's decides to price discriminate, then

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.

The above figure shows a market. -If the market in the figure above changes from perfectly competitive to a profit-maximizing single-price monopoly, the amount of the gain in producer surplus is the area ________.

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above, the length of the double sided arrow is the

A single-price monopoly faces a linear demand curve. If the marginal revenue for the second unit is $20, then the marginal revenue for the

Which of the following is an example of price discrimination?

The U.S. Postal Service has a monopoly over first-class mail service because

How do the price, output, consumer surplus, economic profit, and total surplus for a single-price monopoly compare to that of a competitive industry?

Price (dollars per haircut) Quantity demanded (haircuts per day) 5 50 10 40 15 30 20 20 25 10 30 0 -Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 25th haircut?

The figure above shows a natural monopoly. -In the figure above, if the firm is regulated using a marginal cost pricing rule, the consumer surplus created is equal to the area of

-The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The amount of consumer surplus when the market has a monopoly producer is

Price(dollars) Quantity(units) 8 1 6 2 5 3 4 4 3 5 -The above table gives the demand schedule for a single-price monopoly. If the marginal cost is $3, the profit maximizing output for the monopoly will be between

The capture theory of regulation is that regulations

The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

Describe the three general types of barriers.

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

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

To maximize its profit, a perfectly competitive firm produces so that and a single-price monopoly produces so that .