Question 1

Figure 10-10
  
-Refer to Figure 10-10.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

Accepted Answer

A)  area FHE. 
B)  area FGE. 
C)  area P₁P₂EF. 
D)  area P₁P₂GF. 
A)  area FHE. 
B)  area FGE. 
C)  area P₁P₂EF. 
D)  area P₁P₂GF.

Question 2

A patent

Accepted Answer

A)  grants the creator of a book, film, or piece of music the exclusive right to use the creation for 20 years. 
B)  grants the creator of a book, film, or piece of music the exclusive right to use the creation during the creator's lifetime. 
C)  gives a firm the exclusive right to a new product for 20 years from the date the patent application is filed with the government. 
D)  gives a firm the exclusive right to a new product during the product inventor's lifetime. 
A)  grants the creator of a book, film, or piece of music the exclusive right to use the creation for 20 years. 
B)  grants the creator of a book, film, or piece of music the exclusive right to use the creation during the creator's lifetime. 
C)  gives a firm the exclusive right to a new product for 20 years from the date the patent application is filed with the government. 
D)  gives a firm the exclusive right to a new product during the product inventor's lifetime.

Question 3

Figure 10-17
   Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure.
-Refer to Figure 10-17.The dean of the college argues: "I think the course should be priced to maximize the profit the college earns,so these funds can be used to pay some other expenses." Which price should the dean favor?

Accepted Answer

A)  $0 
B)  $40 
C)  $88 
D)  $150 
A)  $0 
B)  $40 
C)  $88 
D)  $150

Question 4

Figure 10-2
   Figure 10-2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-2.If the firm's average total cost curve is ATC₃,the firm will

Accepted Answer

A)  suffer a loss. 
B)  break even. 
C)  make a profit. 
D)  face competition. 
A)  suffer a loss. 
B)  break even. 
C)  make a profit. 
D)  face competition.

Question 5

A possible advantage of a horizontal merger for the economy is that

Accepted Answer

A)  the merging firms could avoid losses. 
B)  the merged firm might reap economies of scale which could translate into lower prices. 
C)  the degree of competition in the industry will be intensified. 
D)  the government stands to collect more corporate income tax revenue. 
A)  the merging firms could avoid losses. 
B)  the merged firm might reap economies of scale which could translate into lower prices. 
C)  the degree of competition in the industry will be intensified. 
D)  the government stands to collect more corporate income tax revenue.

Question 6

A snack shop inside a hotel in a busy city has a monopoly on food sales if it is the only food vendor in the hotel that is open 24 hours a day.

Accepted Answer

A) True 
 B)False

Question 7

For decades,the NCAA restricted the number of college football and basketball games that could be televised,and in 1982 the University of Georgia and the University of Oklahoma sued the NCAA under the federal antitrust laws.In 1984,the Supreme Court decided the case

Accepted Answer

A)  for the NCAA, citing the fact that belonging to the NCAA was voluntary. 
B)  against the NCAA, citing that the NCAA did not control what television networks put on the air. 
C)  against the NCAA, citing anticompetitive practice. 
D)  against the NCAA, citing explicit collusion among the larger colleges. 
A)  for the NCAA, citing the fact that belonging to the NCAA was voluntary. 
B)  against the NCAA, citing that the NCAA did not control what television networks put on the air. 
C)  against the NCAA, citing anticompetitive practice. 
D)  against the NCAA, citing explicit collusion among the larger colleges.

Question 8

Figure 10-2
   Figure 10-2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-2.The firm's profit-maximizing price is

Accepted Answer

A)  P₁. 
B)  P₂. 
C)  P₃. 
D)  P₄. 
A)  P₁. 
B)  P₂. 
C)  P₃. 
D)  P₄.

Question 9

A profit-maximizing monopoly produces a lower output level than would be produced if the
industry was perfectly competitive.

Accepted Answer

A) True 
 B)False

Question 10

U.S.antitrust laws are designed to prohibit monopolization and encourage competition.Why,then,does the government erect barriers to entry and create monopoly power by granting firms patents?

Accepted Answer

Patents are designed to encourage creati

Question 11

A monopoly differs from monopolistic competition in that

Accepted Answer

A)  a monopoly has market power while a firm in monopolistic competition does not have any market power. 
B)  a monopoly can never make a loss but a firm in monopolistic competition can. 
C)  in a monopoly there are significant entry barriers but there are low barriers to entry in a monopolistically competitive market structure. 
D)  a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve. 
A)  a monopoly has market power while a firm in monopolistic competition does not have any market power. 
B)  a monopoly can never make a loss but a firm in monopolistic competition can. 
C)  in a monopoly there are significant entry barriers but there are low barriers to entry in a monopolistically competitive market structure. 
D)  a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve.

Question 12

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

Accepted Answer

Average revenue is equal to price for an

Question 13

A natural monopoly is characterized by large fixed costs relative to variable costs.

Accepted Answer

A) True 
 B)False

Question 14

If you own the only bookstore in a small town,do you have a monopoly?

Accepted Answer

Because consumers in your town could buy

Question 15

The possibility that the economy may benefit from having market power,rather than being very competitive,is closely identified with which famous economist?

Accepted Answer

A)  Arnold Harberger 
B)  Joseph Schumpeter 
C)  Sergey Brin 
D)  Donald Turner 
A)  Arnold Harberger 
B)  Joseph Schumpeter 
C)  Sergey Brin 
D)  Donald Turner

Question 16

Figure 10-9
   Figure 10-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 10-9.What is the difference between the monopoly's price and perfectly competitive industry's price?

Accepted Answer

A)  The monopoly's price is higher by $9.50. 
B)  The monopoly's price is higher by $13. 
C)  The monopoly's price is higher by $3.50. 
D)  The monopoly's price is higher by $21. 
A)  The monopoly's price is higher by $9.50. 
B)  The monopoly's price is higher by $13. 
C)  The monopoly's price is higher by $3.50. 
D)  The monopoly's price is higher by $21.

Question 17

Economic efficiency in a free market occurs when

Accepted Answer

A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  price is as low as possible. 
A)  consumer surplus is maximized. 
B)  producer surplus is maximized. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  price is as low as possible.

Question 18

In evaluating the degree of economic efficiency in a market,we can state that the size of the deadweight loss in a market will be smaller

Accepted Answer

A)  the greater the difference between marginal cost and price. 
B)  the smaller the difference between marginal cost and average total cost. 
C)  the smaller the difference between marginal cost and price. 
D)  the greater the difference between marginal cost and average revenue. 
A)  the greater the difference between marginal cost and price. 
B)  the smaller the difference between marginal cost and average total cost. 
C)  the smaller the difference between marginal cost and price. 
D)  the greater the difference between marginal cost and average revenue.

Question 19

Figure 10-9
   Figure 10-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 10-9.What is the difference between the monopoly output and the perfectly competitive output?

Accepted Answer

A)  140 units 
B)  240 units 
C)  340 units 
D)  560 units 
A)  140 units 
B)  240 units 
C)  340 units 
D)  560 units

Question 20

If we use a narrow definition of monopoly,then a monopoly is defined as a firm

Accepted Answer

A)  that has been granted special production rights by the government. 
B)  that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products. 
C)  that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. 
D)  that has the largest market share in an industry. 
A)  that has been granted special production rights by the government. 
B)  that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products. 
C)  that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. 
D)  that has the largest market share in an industry.

Figure 10-10 -Refer to Figure 10-10.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

A patent

Figure 10-2 Figure 10-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 10-2.If the firm's average total cost curve is ATC₃,the firm will

A possible advantage of a horizontal merger for the economy is that

A snack shop inside a hotel in a busy city has a monopoly on food sales if it is the only food vendor in the hotel that is open 24 hours a day.

For decades,the NCAA restricted the number of college football and basketball games that could be televised,and in 1982 the University of Georgia and the University of Oklahoma sued the NCAA under the federal antitrust laws.In 1984,the Supreme Court decided the case

Figure 10-2 Figure 10-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 10-2.The firm's profit-maximizing price is

A profit-maximizing monopoly produces a lower output level than would be produced if the industry was perfectly competitive.

U.S.antitrust laws are designed to prohibit monopolization and encourage competition.Why,then,does the government erect barriers to entry and create monopoly power by granting firms patents?

A monopoly differs from monopolistic competition in that

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

A natural monopoly is characterized by large fixed costs relative to variable costs.

If you own the only bookstore in a small town,do you have a monopoly?

The possibility that the economy may benefit from having market power,rather than being very competitive,is closely identified with which famous economist?

Figure 10-9 Figure 10-9 shows the demand and cost curves for a monopolist. -Refer to Figure 10-9.What is the difference between the monopoly's price and perfectly competitive industry's price?

Economic efficiency in a free market occurs when

In evaluating the degree of economic efficiency in a market,we can state that the size of the deadweight loss in a market will be smaller

Figure 10-9 Figure 10-9 shows the demand and cost curves for a monopolist. -Refer to Figure 10-9.What is the difference between the monopoly output and the perfectly competitive output?

If we use a narrow definition of monopoly,then a monopoly is defined as a firm

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 10: Monopoly and Antitrust Policy

Figure 10-10 -Refer to Figure 10-10.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

A patent

Figure 10-2 Figure 10-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 10-2.If the firm's average total cost curve is ATC₃,the firm will

A possible advantage of a horizontal merger for the economy is that

A snack shop inside a hotel in a busy city has a monopoly on food sales if it is the only food vendor in the hotel that is open 24 hours a day.

For decades,the NCAA restricted the number of college football and basketball games that could be televised,and in 1982 the University of Georgia and the University of Oklahoma sued the NCAA under the federal antitrust laws.In 1984,the Supreme Court decided the case

Figure 10-2 Figure 10-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 10-2.The firm's profit-maximizing price is

A profit-maximizing monopoly produces a lower output level than would be produced if the industry was perfectly competitive.

U.S.antitrust laws are designed to prohibit monopolization and encourage competition.Why,then,does the government erect barriers to entry and create monopoly power by granting firms patents?

A monopoly differs from monopolistic competition in that

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

A natural monopoly is characterized by large fixed costs relative to variable costs.

If you own the only bookstore in a small town,do you have a monopoly?

The possibility that the economy may benefit from having market power,rather than being very competitive,is closely identified with which famous economist?

Figure 10-9 Figure 10-9 shows the demand and cost curves for a monopolist. -Refer to Figure 10-9.What is the difference between the monopoly's price and perfectly competitive industry's price?

Economic efficiency in a free market occurs when

In evaluating the degree of economic efficiency in a market,we can state that the size of the deadweight loss in a market will be smaller

Figure 10-9 Figure 10-9 shows the demand and cost curves for a monopolist. -Refer to Figure 10-9.What is the difference between the monopoly output and the perfectly competitive output?

If we use a narrow definition of monopoly,then a monopoly is defined as a firm

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters