Question 1

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

Accepted Answer

A)  Airlines are practicing imperfect price discrimination to raise their profits. 
B)  Airlines charge a different rate based on the different nature of peoples' travel needs. 
C)  Airlines are attempting to charge people based on their willingness to pay. 
D)  All of the above are correct. 
A)  Airlines are practicing imperfect price discrimination to raise their profits. 
B)  Airlines charge a different rate based on the different nature of peoples' travel needs. 
C)  Airlines are attempting to charge people based on their willingness to pay. 
D)  All of the above are correct. D

Question 2

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit,what is the monopolist's profit?

Accepted Answer

A)  $200 
B)  $400 
C)  $600 
D)  $800 
A)  $200 
B)  $400 
C)  $600 
D)  $800 A

Question 3

Table 15-5
  
-Refer to Table 15-5.If the monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Accepted Answer

A)  3 units 
B)  4 units 
C)  5 units 
D)  6 units 
A)  3 units 
B)  4 units 
C)  5 units 
D)  6 units A

Question 4

Table 15-4
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-4.To maximize profit,the monopolist sets price at

Accepted Answer

A)  $10. 
B)  $15. 
C)  $20. 
D)  $25. 
A)  $10. 
B)  $15. 
C)  $20. 
D)  $25.

Question 5

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Accepted Answer

A)  is unaffected. 
B)  decreases. 
C)  increases. 
D)  There is not enough information given in answer the question. 
A)  is unaffected. 
B)  decreases. 
C)  increases. 
D)  There is not enough information given in answer the question.

Question 6

Figure 15-1  
-Refer to Figure 15-1.The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market.Which of the following monopoly types best coincides with the figure?

Accepted Answer

A)  ownership of a key resource by a single firm 
B)  natural monopoly 
C)  government-created monopoly 
D)  a patent or copyright monopoly 
A)  ownership of a key resource by a single firm 
B)  natural monopoly 
C)  government-created monopoly 
D)  a patent or copyright monopoly

Question 7

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3,then marginal revenue of selling the eighth unit is equal to

Accepted Answer

A)  $3. 
B)  $4. 
C)  $24. 
D)  -$4. 
A)  $3. 
B)  $4. 
C)  $24. 
D)  -$4.

Question 8

For a monopolist,when the price effect is greater than the output effect,marginal revenue is

Accepted Answer

A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized. 
A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized.

Question 9

Table 15-2
Dreher's Designer Shirt Company,a monopolist,has the following cost and revenue information.
  
-Refer to Table 15-2.What is the marginal revenue from selling the 2nd shirt?

Accepted Answer

A)  $140 
B)  $150 
C)  $160 
D)  $170 
A)  $140 
B)  $150 
C)  $160 
D)  $170

Question 10

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Accepted Answer

If deregulation leads to increased compe

Question 11

When a local grocery store offers discount coupons in the Sunday paper it is most likely trying to

Accepted Answer

A)  reduce prices for all customers. 
B)  encourage literacy. 
C)  encourage arbitrage. 
D)  price discriminate. 
A)  reduce prices for all customers. 
B)  encourage literacy. 
C)  encourage arbitrage. 
D)  price discriminate.

Question 12

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Accepted Answer

A) True 
 B)False

Question 13

Competitive firms have

Accepted Answer

A)  downward-sloping demand curves,and they can sell as much output as they desire at the market price. 
B)  downward-sloping demand curves,and they can sell only a limited quantity of output at each price. 
C)  horizontal demand curves,and they can sell as much output as they desire at the market price. 
D)  horizontal demand curves,and they can sell only a limited quantity of output at each price. 
A)  downward-sloping demand curves,and they can sell as much output as they desire at the market price. 
B)  downward-sloping demand curves,and they can sell only a limited quantity of output at each price. 
C)  horizontal demand curves,and they can sell as much output as they desire at the market price. 
D)  horizontal demand curves,and they can sell only a limited quantity of output at each price.

Question 14

For a monopoly,

Accepted Answer

A)  average revenue exceeds marginal revenue. 
B)  average revenue equals marginal revenue. 
C)  average revenue is less than marginal revenue. 
D)  price equals marginal revenue. 
A)  average revenue exceeds marginal revenue. 
B)  average revenue equals marginal revenue. 
C)  average revenue is less than marginal revenue. 
D)  price equals marginal revenue.

Question 15

Price discrimination explains why Ivy League universities often base tuition costs on students'

Accepted Answer

A)  age. 
B)  financial resources. 
C)  high school GPA. 
D)  gender. 
A)  age. 
B)  financial resources. 
C)  high school GPA. 
D)  gender.

Question 16

Antitrust laws allow the government to

Accepted Answer

A)  prevent mergers. 
B)  break up companies. 
C)  promote competition. 
D)  All of the above are correct. 
A)  prevent mergers. 
B)  break up companies. 
C)  promote competition. 
D)  All of the above are correct.

Question 17

A benefit to society of the patent and copyright laws is that those laws

Accepted Answer

A)  help to keep prices down. 
B)  help to prevent a single firm from acquiring ownership of a key resource. 
C)  encourage creative activity. 
D)  discourage excessive amounts of output of certain products. 
A)  help to keep prices down. 
B)  help to prevent a single firm from acquiring ownership of a key resource. 
C)  encourage creative activity. 
D)  discourage excessive amounts of output of certain products.

Question 18

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Accepted Answer

A)  consumer surplus. 
B)  consumer benefit. 
C)  price discriminant. 
D)  deadweight loss. 
A)  consumer surplus. 
B)  consumer benefit. 
C)  price discriminant. 
D)  deadweight loss.

Question 19

A market force that can prevent firms from price discriminating is

Accepted Answer

A)  fluctuating resource prices. 
B)  arbitrage. 
C)  high fixed costs. 
D)  marginal-cost pricing. 
A)  fluctuating resource prices. 
B)  arbitrage. 
C)  high fixed costs. 
D)  marginal-cost pricing.

Question 20

A monopolist maximizes profits by

Accepted Answer

A)  producing an output level where marginal revenue equals marginal cost. 
B)  charging a price equal to marginal revenue and marginal cost. 
C)  charging a price where marginal cost equals average total cost. 
D)  Both a and b are correct. 
A)  producing an output level where marginal revenue equals marginal cost. 
B)  charging a price equal to marginal revenue and marginal cost. 
C)  charging a price where marginal cost equals average total cost. 
D)  Both a and b are correct.

Exam 15: Monopoly

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit,what is the monopolist's profit?

Table 15-5 -Refer to Table 15-5.If the monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Table 15-4 Consider the following demand and cost information for a monopoly. -Refer to Table 15-4.To maximize profit,the monopolist sets price at

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Figure 15-1 -Refer to Figure 15-1.The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market.Which of the following monopoly types best coincides with the figure?

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3,then marginal revenue of selling the eighth unit is equal to

For a monopolist,when the price effect is greater than the output effect,marginal revenue is

Table 15-2 Dreher's Designer Shirt Company,a monopolist,has the following cost and revenue information. -Refer to Table 15-2.What is the marginal revenue from selling the 2nd shirt?

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

When a local grocery store offers discount coupons in the Sunday paper it is most likely trying to

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Competitive firms have

For a monopoly,

Price discrimination explains why Ivy League universities often base tuition costs on students'

Antitrust laws allow the government to

A benefit to society of the patent and copyright laws is that those laws

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

A market force that can prevent firms from price discriminating is

A monopolist maximizes profits by

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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