Question 1

What factor(s) enable a monopoly to make an economic profit in the long run?

Accepted Answer

Monopolies can make an economi

Question 2

For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss.

Accepted Answer

A) True 
 B)False

Question 3

-The table above gives the demand for a monopolist's output. What is the total revenue 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 4

-In the figure above, a single-price unregulated monopoly sets a price equal to

Accepted Answer

A)  a. 
B)  b. 
C)  c. 
D)  d. 
A)  a. 
B)  b. 
C)  c. 
D)  d.

Question 5

Patents encourage inventions because without a patent

Accepted Answer

A)  other firms could enter the inventor's market by producing the same product. 
B)  nobody would demand the inventor's product. 
C)  the inventor would receive no tax breaks. 
D)  all markets would be public franchises. 
A)  other firms could enter the inventor's market by producing the same product. 
B)  nobody would demand the inventor's product. 
C)  the inventor would receive no tax breaks. 
D)  all markets would be public franchises.

Question 6

Consumer surplus is

Accepted Answer

A)  positive in the case of a monopolist practicing perfect price discrimination. 
B)  equal to the price minus the marginal cost. 
C)  less in the case of a single-price monopoly than in the case of a perfectly competitive industry. 
D)  zero for a single-price monopolist. 
A)  positive in the case of a monopolist practicing perfect price discrimination. 
B)  equal to the price minus the marginal cost. 
C)  less in the case of a single-price monopoly than in the case of a perfectly competitive industry. 
D)  zero for a single-price monopolist.

Question 7

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is

Accepted Answer

A)  $300. 
B)  $225. 
C)  $150. 
D)  $10. 
A)  $300. 
B)  $225. 
C)  $150. 
D)  $10.

Question 8

-If a marginal cost pricing rule is imposed on the firm in the figure above, the firm will produce

Accepted Answer

A)  5 units. 
B)  20 units. 
C)  30 units. 
D)  40 units. 
A)  5 units. 
B)  20 units. 
C)  30 units. 
D)  40 units.

Question 9

-The figure above shows the demand and marginal revenue curves facing Sue's Surfboards, the sole renter of surfboards on Big Wave Island. If Sue is renting 25 surfboards an hour so that the marginal revenue is negative, then Sue's Surfboards

Accepted Answer

A)  can increase its profit by increasing the number of rentals. 
B)  must face an inelastic demand for surfboard rentals. 
C)  must face a unit elastic demand for surfboard rentals. 
D)  must face an elastic demand for surfboard rentals. 
A)  can increase its profit by increasing the number of rentals. 
B)  must face an inelastic demand for surfboard rentals. 
C)  must face a unit elastic demand for surfboard rentals. 
D)  must face an elastic demand for surfboard rentals.

Question 10

-Anastasia's Gold Mines, a single-price monopoly, faces the demand schedule shown in the first table above and has the cost schedule shown in the second table above.
a) Calculate Anastasia's marginal revenue schedule. In a figure, draw the demand curve and the marginal revenue curve.
b) Calculate Anastasia's marginal cost and average total cost schedules. In the same figure that you drew the demand and marginal revenue curves, draw the marginal and the average total cost curves.
c) What are Anastasia's profit-maximizing output and price? What is Anastasia's economic profit? Explain your answer.
d) Does Anastasia's Gold Mines use resources efficiently? Explain your answer.

Accepted Answer

@#IMG-DLM& a) Anastasia's marginal revenue schedul

Question 11

-An efficient allocation of resources is reached in the figure above when output equals

Accepted Answer

A)  1 million. 
B)  2 million. 
C)  3 million. 
D)  4 million. 
A)  1 million. 
B)  2 million. 
C)  3 million. 
D)  4 million.

Question 12

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

Accepted Answer

In the short run, a monopoly can make an

Question 13

A natural monopoly regulated with a marginal cost pricing rule results in

Accepted Answer

A)  an economic loss for the regulated firm. 
B)  an economic profit for the regulated firm. 
C)  a normal profit for the regulated firm. 
D)  a deadweight loss. 
A)  an economic loss for the regulated firm. 
B)  an economic profit for the regulated firm. 
C)  a normal profit for the regulated firm. 
D)  a deadweight loss.

Question 14

This type of firm would likely operate as a monopoly

Accepted Answer

A)  one of many U.S. wheat farmers. 
B)  one of the few U.S. auto makers. 
C)  AT&T long distance phone service. 
D)  the local water company. 
A)  one of many U.S. wheat farmers. 
B)  one of the few U.S. auto makers. 
C)  AT&T long distance phone service. 
D)  the local water company.

Question 15

If the government grants a firm a public franchise to supply coal, a monopoly is created by

Accepted Answer

A)  a natural barrier to entry. 
B)  a legal barrier to entry. 
C)  price discrimination. 
D)  All of the above answers are correct. 
A)  a natural barrier to entry. 
B)  a legal barrier to entry. 
C)  price discrimination. 
D)  All of the above answers are correct.

Question 16

The marginal revenue curve for a single-price monopoly

Accepted Answer

A)  is horizontal. 
B)  is upward sloping. 
C)  lies above the market demand curve. 
D)  lies below the market demand curve. 
A)  is horizontal. 
B)  is upward sloping. 
C)  lies above the market demand curve. 
D)  lies below the market demand curve.

Question 17

-In the above figure, if the natural monopoly is not regulated it will produce

Accepted Answer

A)  12 million units at a price of $18 per unit. 
B)  8 million units at a price of $12 per unit. 
C)  8 million units at a price of $21 per unit. 
D)  8 million units at a price of $24 per unit. 
A)  12 million units at a price of $18 per unit. 
B)  8 million units at a price of $12 per unit. 
C)  8 million units at a price of $21 per unit. 
D)  8 million units at a price of $24 per unit.

Question 18

The airline and trucking industries are two examples of industries that were regulated because they were natural monopolies.

Accepted Answer

A) True 
 B)False

Question 19

For a single-price monopoly, marginal revenue is ________ when demand is elastic and is ________ when demand is inelastic.

Accepted Answer

A)  negative; negative 
B)  negative; positive 
C)  positive; negative 
D)  positive; positive 
A)  negative; negative 
B)  negative; positive 
C)  positive; negative 
D)  positive; positive

Question 20

Which of the following is a characteristic of monopoly?

Accepted Answer

A)  The firm faces competition from a few other firms. 
B)  The firm produces a product that has many close substitutes. 
C)  There are barriers to enter the market. 
D)  The firm's demand curve is perfectly elastic. 
A)  The firm faces competition from a few other firms. 
B)  The firm produces a product that has many close substitutes. 
C)  There are barriers to enter the market. 
D)  The firm's demand curve is perfectly elastic.

What factor(s) enable a monopoly to make an economic profit in the long run?

For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss.

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

-In the figure above, a single-price unregulated monopoly sets a price equal to

Patents encourage inventions because without a patent

Consumer surplus is

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is

-If a marginal cost pricing rule is imposed on the firm in the figure above, the firm will produce

-The figure above shows the demand and marginal revenue curves facing Sue's Surfboards, the sole renter of surfboards on Big Wave Island. If Sue is renting 25 surfboards an hour so that the marginal revenue is negative, then Sue's Surfboards

-An efficient allocation of resources is reached in the figure above when output equals

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

A natural monopoly regulated with a marginal cost pricing rule results in

This type of firm would likely operate as a monopoly

If the government grants a firm a public franchise to supply coal, a monopoly is created by

The marginal revenue curve for a single-price monopoly

-In the above figure, if the natural monopoly is not regulated it will produce

The airline and trucking industries are two examples of industries that were regulated because they were natural monopolies.

For a single-price monopoly, marginal revenue is when demand is elastic and is when demand is inelastic.

Which of the following is a characteristic of monopoly?

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

What factor(s) enable a monopoly to make an economic profit in the long run?

For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss.

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

-In the figure above, a single-price unregulated monopoly sets a price equal to

Patents encourage inventions because without a patent

Consumer surplus is

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is

-If a marginal cost pricing rule is imposed on the firm in the figure above, the firm will produce

-The figure above shows the demand and marginal revenue curves facing Sue's Surfboards, the sole renter of surfboards on Big Wave Island. If Sue is renting 25 surfboards an hour so that the marginal revenue is negative, then Sue's Surfboards

-An efficient allocation of resources is reached in the figure above when output equals

What kind of profit can a monopoly make in the short run? In the long run? Explain your answers.

A natural monopoly regulated with a marginal cost pricing rule results in

This type of firm would likely operate as a monopoly

If the government grants a firm a public franchise to supply coal, a monopoly is created by

The marginal revenue curve for a single-price monopoly

-In the above figure, if the natural monopoly is not regulated it will produce

The airline and trucking industries are two examples of industries that were regulated because they were natural monopolies.

For a single-price monopoly, marginal revenue is ________ when demand is elastic and is ________ when demand is inelastic.

Which of the following is a characteristic of monopoly?

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

For a single-price monopoly, marginal revenue is when demand is elastic and is when demand is inelastic.