Question 1

-Use the above figure. The profit-maximizing or loss minimizing output and price will be

Accepted Answer

A)    and   . 
B)    and   . 
C)    and   . 
D)    and   . 
A)    and   . 
B)    and   . 
C)    and   . 
D)    and   .

Question 2

-Refer to the above table. Given the demand and cost schedules, what are the maximized economic profits for this monopolist?

Accepted Answer

A)  $122 
B)  $152 
C)  $220 
D)  $150 
A)  $122 
B)  $152 
C)  $220 
D)  $150

Question 3

A monopolist's demand curve is

Accepted Answer

A)  perfectly elastic. 
B)  perfectly inelastic. 
C)  of unit elasticity throughout. 
D)  the industry demand curve. 
A)  perfectly elastic. 
B)  perfectly inelastic. 
C)  of unit elasticity throughout. 
D)  the industry demand curve.

Question 4

When a monopolist sells the same product at different prices and the prices are related to cost differences, we have

Accepted Answer

A)  monopoly pricing. 
B)  marginal cost pricing. 
C)  price discrimination. 
D)  price differentiation. 
A)  monopoly pricing. 
B)  marginal cost pricing. 
C)  price discrimination. 
D)  price differentiation.

Question 5

-In the above figure, what is total cost at the profit-maximizing point?

Accepted Answer

A)  $182 
B)  $126 
C)  $112 
D)  $170 
A)  $182 
B)  $126 
C)  $112 
D)  $170

Question 6

Economic inefficiency of a monopoly is indicated by

Accepted Answer

A)  P =   . 
B)  P > MR. 
C)  P > MC. 
D)  MR = MC. 
A)  P =   . 
B)  P > MR. 
C)  P > MC. 
D)  MR = MC.

Question 7

If a monopolist is producing at an output rate at which P = ATC, then

Accepted Answer

A)  its economic profit will be zero. 
B)  its economic profit will be positive. 
C)  it is maximizing its profits. 
D)  it is minimizing its losses. 
A)  its economic profit will be zero. 
B)  its economic profit will be positive. 
C)  it is maximizing its profits. 
D)  it is minimizing its losses.

Question 8

When the number of substitutes increase, the demand curve for a monopolist will

Accepted Answer

A)  not change. 
B)  become more elastic. 
C)  become more inelastic. 
D)  become steeper. 
A)  not change. 
B)  become more elastic. 
C)  become more inelastic. 
D)  become steeper.

Question 9

Economists criticize monopolies because monopolies

Accepted Answer

A)  always price discriminate. 
B)  receive accounting profits. 
C)  restrict output and raise prices compared to a competitive situation. 
D)  make consumers pay more for their product than the customers value the product. 
A)  always price discriminate. 
B)  receive accounting profits. 
C)  restrict output and raise prices compared to a competitive situation. 
D)  make consumers pay more for their product than the customers value the product.

Question 10

-Refer to the above table. Given the demand and cost schedules, what is the profit-maximizing price for this monopolist?

Accepted Answer

A)  $9 
B)  $12 
C)  $11 
D)  $10 
A)  $9 
B)  $12 
C)  $11 
D)  $10

Question 11

When TR is increasing as a monopolist's output increases,

Accepted Answer

A)  MR is negative. 
B)  MR is positive. 
C)  MR = 0. 
D)  MR may be positive or negative. 
A)  MR is negative. 
B)  MR is positive. 
C)  MR = 0. 
D)  MR may be positive or negative.

Question 12

Senior citizens can buy movie tickets at a lower price than the general public. This is an example of

Accepted Answer

A)  age discrimination. 
B)  demand discrimination. 
C)  price discrimination. 
D)  price differentiation. 
A)  age discrimination. 
B)  demand discrimination. 
C)  price discrimination. 
D)  price differentiation.

Question 13

-In the above figure, if the firm is producing Q1 units at a price P1, the firm should

Accepted Answer

A)  increase output and decrease price. 
B)  decrease output and increase price. 
C)  not change output or price. 
D)  shut down. 
A)  increase output and decrease price. 
B)  decrease output and increase price. 
C)  not change output or price. 
D)  shut down.

Question 14

Price discrimination exists when

Accepted Answer

A)  a firm charges different buyers different prices for its product but the costs are the same. 
B)  each buyer is treated equally. 
C)  sales are made below cost. 
D)  a firm charges each buyer a price of the product in proportion to its costs. 
A)  a firm charges different buyers different prices for its product but the costs are the same. 
B)  each buyer is treated equally. 
C)  sales are made below cost. 
D)  a firm charges each buyer a price of the product in proportion to its costs.

Question 15

A patent provides legal protection for an invention for

Accepted Answer

A)  7 years. 
B)  11 years. 
C)  20 years. 
D)  as long as the invention is valuable. 
A)  7 years. 
B)  11 years. 
C)  20 years. 
D)  as long as the invention is valuable.

Question 16

If government regulations significantly increase the cost of operating within a particular market, one result is that

Accepted Answer

A)  new firms are discouraged from entering the market. 
B)  barriers to entry are nullified. 
C)  a perfectly competitive market environment is encouraged. 
D)  new firms are encouraged to enter the market. 
A)  new firms are discouraged from entering the market. 
B)  barriers to entry are nullified. 
C)  a perfectly competitive market environment is encouraged. 
D)  new firms are encouraged to enter the market.

Question 17

Economies of scale may be a barrier to entry in a situation in which

Accepted Answer

A)  only small-scale production can lower the per-unit cost of production. 
B)  only small-scale production can meet the constantly changing market demand. 
C)  only large-scale production can lower the per-unit cost of production. 
D)  large-scale production is inefficient. 
A)  only small-scale production can lower the per-unit cost of production. 
B)  only small-scale production can meet the constantly changing market demand. 
C)  only large-scale production can lower the per-unit cost of production. 
D)  large-scale production is inefficient.

Question 18

The conclusion that a monopoly results in lower output and higher prices than perfect competition relies on the assumption that

Accepted Answer

A)  the demand curve for a monopoly is horizontal. 
B)  consumers are ignorant of the effects of monopoly. 
C)  the costs of production are the same whether the industry is perfectly competitive or a monopoly. 
D)  elasticity of demand varies along the market demand curve. 
A)  the demand curve for a monopoly is horizontal. 
B)  consumers are ignorant of the effects of monopoly. 
C)  the costs of production are the same whether the industry is perfectly competitive or a monopoly. 
D)  elasticity of demand varies along the market demand curve.

Question 19

The demand curve facing a monopolist will be more elastic

Accepted Answer

A)  the greater is the number of substitute products. 
B)  as the consumers' need for the good increases. 
C)  the greater is the amount of fixed costs to cover. 
D)  as the number of consumers increases. 
A)  the greater is the number of substitute products. 
B)  as the consumers' need for the good increases. 
C)  the greater is the amount of fixed costs to cover. 
D)  as the number of consumers increases.

Question 20

If a monopolist wants to increase the amount it sells, it

Accepted Answer

A)  will keep the price the same. 
B)  must lower the price on all units. 
C)  must accept lower profits. 
D)  must lower the cost of production. 
A)  will keep the price the same. 
B)  must lower the price on all units. 
C)  must accept lower profits. 
D)  must lower the cost of production.

Exam 24: Monopoly

-Use the above figure. The profit-maximizing or loss minimizing output and price will be

-Refer to the above table. Given the demand and cost schedules, what are the maximized economic profits for this monopolist?

A monopolist's demand curve is

When a monopolist sells the same product at different prices and the prices are related to cost differences, we have

-In the above figure, what is total cost at the profit-maximizing point?

Economic inefficiency of a monopoly is indicated by

If a monopolist is producing at an output rate at which P = ATC, then

When the number of substitutes increase, the demand curve for a monopolist will

Economists criticize monopolies because monopolies

-Refer to the above table. Given the demand and cost schedules, what is the profit-maximizing price for this monopolist?

When TR is increasing as a monopolist's output increases,

Senior citizens can buy movie tickets at a lower price than the general public. This is an example of

-In the above figure, if the firm is producing Q1 units at a price P1, the firm should

Price discrimination exists when

A patent provides legal protection for an invention for

If government regulations significantly increase the cost of operating within a particular market, one result is that

Economies of scale may be a barrier to entry in a situation in which

The conclusion that a monopoly results in lower output and higher prices than perfect competition relies on the assumption that

The demand curve facing a monopolist will be more elastic

If a monopolist wants to increase the amount it sells, it

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

-In the above figure, if the firm is producing Q₁ units at a price P₁, the firm should