Question 1

-The motel whose costs are given in the table above has total fixed costs equal to

Accepted Answer

A)  $0. 
B)  $100. 
C)  $200. 
D)  $201. 
A)  $0. 
B)  $100. 
C)  $200. 
D)  $201.

Question 2

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then it would sell

Accepted Answer

A)  30 tickets. 
B)  50 tickets. 
C)  60 tickets. 
D)  100 tickets. 
A)  30 tickets. 
B)  50 tickets. 
C)  60 tickets. 
D)  100 tickets.

Question 3

Regulation that specifies that a firm's profits must be shared with its customers if the profit rises above a target level is called

Accepted Answer

A)  rate of return regulation. 
B)  minimum price regulation. 
C)  earnings sharing regulation. 
D)  average cost pricing. 
A)  rate of return regulation. 
B)  minimum price regulation. 
C)  earnings sharing regulation. 
D)  average cost pricing.

Question 4

The marginal revenue curve for a single-price monopoly

Accepted Answer

A)  lies below its demand curve. 
B)  coincides with its demand curve. 
C)  lies above its demand curve. 
D)  is horizontal. 
A)  lies below its demand curve. 
B)  coincides with its demand curve. 
C)  lies above its demand curve. 
D)  is horizontal.

Question 5

A patent creates a monopoly by restricting ________.

Accepted Answer

A)  demand for the product 
B)  the number of complements for the product 
C)  the amount of advertising that can be undertaken 
D)  entry into the market 
A)  demand for the product 
B)  the number of complements for the product 
C)  the amount of advertising that can be undertaken 
D)  entry into the market

Question 6

-If the firm in the figure above is unregulated, it will charge a price of

Accepted Answer

A)  $5 per unit. 
B)  $25 per unit. 
C)  $40 per unit. 
D)  $20 per unit. 
A)  $5 per unit. 
B)  $25 per unit. 
C)  $40 per unit. 
D)  $20 per unit.

Question 7

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

Accepted Answer

A)  $18 
B)  $4 
C)  $3 
D)  -$2 
A)  $18 
B)  $4 
C)  $3 
D)  -$2

Question 8

Describe the general types of barriers.

Accepted Answer

Barriers to entry can be divided into le

Question 9

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

Accepted Answer

A)  10 cents per cubic foot. 
B)  20 cents per cubic foot. 
C)  30 cents per cubic foot. 
D)  40 cents per cubic foot. 
A)  10 cents per cubic foot. 
B)  20 cents per cubic foot. 
C)  30 cents per cubic foot. 
D)  40 cents per cubic foot.

Question 10

A monopolist, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopolist decrease its price if it wants to increase its output?

Accepted Answer

Because the monopolist does control the

Question 11

-The figure above shows the demand and cost curves for a single-price monopoly. What level of output maximizes the firm's economic profit?

Accepted Answer

A)  0 units 
B)  20 units 
C)  30 units 
D)  50 units 
A)  0 units 
B)  20 units 
C)  30 units 
D)  50 units

Question 12

In the long run, a single-price monopolist will

Accepted Answer

A)  make zero economic profit. 
B)  be able to continue to make an economic profit as long as there is a barrier to entry. 
C)  end up being regulated by the government because it is making short-run economic profits. 
D)  Both answers A and C are correct. 
A)  make zero economic profit. 
B)  be able to continue to make an economic profit as long as there is a barrier to entry. 
C)  end up being regulated by the government because it is making short-run economic profits. 
D)  Both answers A and C are correct.

Question 13

Price discrimination

Accepted Answer

A)  converts consumer surplus into producer surplus. 
B)  converts producer surplus into economic profit. 
C)  maximizes the difference between consumer surplus and producer surplus. 
D)  converts deadweight loss into consumer surplus. 
A)  converts consumer surplus into producer surplus. 
B)  converts producer surplus into economic profit. 
C)  maximizes the difference between consumer surplus and producer surplus. 
D)  converts deadweight loss into consumer surplus.

Question 14

An attempt by a firm to create a monopoly and gain the economic profit from the monopoly is called

Accepted Answer

A)  collusion. 
B)  intrusion. 
C)  profit seeking. 
D)  rent seeking. 
A)  collusion. 
B)  intrusion. 
C)  profit seeking. 
D)  rent seeking.

Question 15

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

Accepted Answer

A)  legal monopoly. 
B)  natural monopoly. 
C)  single-price monopoly. 
D)  price-discriminating monopoly. 
A)  legal monopoly. 
B)  natural monopoly. 
C)  single-price monopoly. 
D)  price-discriminating monopoly.

Question 16

In Delaware County, Pennsylvania, all homes, businesses, and other organizations purchase their water from one seller, Philadelphia Suburban Water Co. (PSWCo). Economists refer to public utility companies like PSWCo as natural monopolies because their

Accepted Answer

A)  marginal cost curves lie everywhere beneath their average fixed cost curves. 
B)  marginal cost curves lie everywhere beneath their demand curves. 
C)  average total cost curves lie everywhere above their demand curves. 
D)  None of the above answers is correct. 
A)  marginal cost curves lie everywhere beneath their average fixed cost curves. 
B)  marginal cost curves lie everywhere beneath their demand curves. 
C)  average total cost curves lie everywhere above their demand curves. 
D)  None of the above answers is correct.

Question 17

-Consider the market for cable television, a natural monopoly, shown in the figure above. If the regulator imposes a marginal cost pricing rule, the firm provides service to

Accepted Answer

A)  3.5 million households. 
B)  6 million households. 
C)  10.5 million households. 
D)  12.5 million households. 
A)  3.5 million households. 
B)  6 million households. 
C)  10.5 million households. 
D)  12.5 million households.

Question 18

Which of the following is NOT a barrier to entry for a monopoly?

Accepted Answer

A)  economies of scale for the relevant range of output 
B)  a patent on the product being sold 
C)  the ability to charge a price that is above marginal cost 
D)  receiving a public franchise 
A)  economies of scale for the relevant range of output 
B)  a patent on the product being sold 
C)  the ability to charge a price that is above marginal cost 
D)  receiving a public franchise

Question 19

Rent seeking through lobbying

Accepted Answer

A)  reduces deadweight loss. 
B)  uses up resources that result in additional costs to society. 
C)  results in perfect price discrimination. 
D)  results in perfectly competitive industries. 
A)  reduces deadweight loss. 
B)  uses up resources that result in additional costs to society. 
C)  results in perfect price discrimination. 
D)  results in perfectly competitive industries.

Question 20

For a single-price monopolist, marginal revenue is less than price because

Accepted Answer

A)  the revenue gain from the last unit sold is offset by a revenue loss on the units that previously had been sold at a higher price. 
B)  the revenue gain from the last unit sold is offset by further gains in price on units not sold at all. 
C)  total revenue always decreases as output increases. 
D)  the price does not have to be lowered on all previous units sold. 
A)  the revenue gain from the last unit sold is offset by a revenue loss on the units that previously had been sold at a higher price. 
B)  the revenue gain from the last unit sold is offset by further gains in price on units not sold at all. 
C)  total revenue always decreases as output increases. 
D)  the price does not have to be lowered on all previous units sold.

-The motel whose costs are given in the table above has total fixed costs equal to

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then it would sell

Regulation that specifies that a firm's profits must be shared with its customers if the profit rises above a target level is called

The marginal revenue curve for a single-price monopoly

A patent creates a monopoly by restricting ________.

-If the firm in the figure above is unregulated, it will charge a price of

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

Describe the general types of barriers.

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

A monopolist, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopolist decrease its price if it wants to increase its output?

-The figure above shows the demand and cost curves for a single-price monopoly. What level of output maximizes the firm's economic profit?

In the long run, a single-price monopolist will

Price discrimination

An attempt by a firm to create a monopoly and gain the economic profit from the monopoly is called

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

In Delaware County, Pennsylvania, all homes, businesses, and other organizations purchase their water from one seller, Philadelphia Suburban Water Co. (PSWCo). Economists refer to public utility companies like PSWCo as natural monopolies because their

-Consider the market for cable television, a natural monopoly, shown in the figure above. If the regulator imposes a marginal cost pricing rule, the firm provides service to

Which of the following is NOT a barrier to entry for a monopoly?

Rent seeking through lobbying

For a single-price monopolist, marginal revenue is less than price because

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 13: Monopoly

-The motel whose costs are given in the table above has total fixed costs equal to

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then it would sell

Regulation that specifies that a firm's profits must be shared with its customers if the profit rises above a target level is called

The marginal revenue curve for a single-price monopoly

A patent creates a monopoly by restricting ________.

-If the firm in the figure above is unregulated, it will charge a price of

-The table above gives the demand for a monopolist's output. What is the marginal revenue when output is increased from 5 to 6 units?

Describe the general types of barriers.

-Given the market demand and cost data in the above figure, the existence of two firms equal sized firms producing a total of 8 million cubic feet of natural gas means that the long-run average cost of producing natural gas is

A monopolist, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopolist decrease its price if it wants to increase its output?

-The figure above shows the demand and cost curves for a single-price monopoly. What level of output maximizes the firm's economic profit?

In the long run, a single-price monopolist will

Price discrimination

An attempt by a firm to create a monopoly and gain the economic profit from the monopoly is called

A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a

In Delaware County, Pennsylvania, all homes, businesses, and other organizations purchase their water from one seller, Philadelphia Suburban Water Co. (PSWCo). Economists refer to public utility companies like PSWCo as natural monopolies because their

-Consider the market for cable television, a natural monopoly, shown in the figure above. If the regulator imposes a marginal cost pricing rule, the firm provides service to

Which of the following is NOT a barrier to entry for a monopoly?

Rent seeking through lobbying

For a single-price monopolist, marginal revenue is less than price because

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters