Question 1

Figure 15-6  
-Refer to Figure 15-6.If the monopoly operates at an output level less than Q0,then an increase in output toward (but not exceeding)Q0 would

Accepted Answer

A)  raise the price and raise total surplus. 
B)  lower the price and raise total surplus. 
C)  raise the price and lower total surplus. 
D)  lower the price and lower total surplus. 
A)  raise the price and raise total surplus. 
B)  lower the price and raise total surplus. 
C)  raise the price and lower total surplus. 
D)  lower the price and lower total surplus.

Question 2

Figure 15-12  
-Refer to Figure 15-12.If the monopoly firm is not allowed to price discriminate,then the deadweight loss amounts to

Accepted Answer

A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250. 
A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250.

Question 3

Compared to the monopoly outcome with a single price,imperfect price discrimination

Accepted Answer

A)  (i)and (ii)only 
B)  (ii)and (iii)only 
C)  (i)and (iii)only 
D)  (i),(ii),and (iii) 
A)  (i)and (ii)only 
B)  (ii)and (iii)only 
C)  (i)and (iii)only 
D)  (i),(ii),and (iii)

Question 4

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 cost of the 6th shirt?

Accepted Answer

A)  $44 
B)  $46 
C)  $55 
D)  $60 
A)  $44 
B)  $46 
C)  $55 
D)  $60

Question 5

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Accepted Answer

A)  consumer surplus 
B)  deadweight loss 
C)  market power 
D)  arbitrage 
A)  consumer surplus 
B)  deadweight loss 
C)  market power 
D)  arbitrage

Question 6

A perfectly competitive market

Accepted Answer

A)  may not be in the best interests of society,whereas a monopoly market promotes general economic well-being 
B)  promotes general economic well-being,whereas a monopoly market may not be in the best interests of society. 
C)  and a monopoly market are equally likely to promote general economic well-being. 
D)  is less likely to promote general economic well-being than a monopoly market. 
A)  may not be in the best interests of society,whereas a monopoly market promotes general economic well-being 
B)  promotes general economic well-being,whereas a monopoly market may not be in the best interests of society. 
C)  and a monopoly market are equally likely to promote general economic well-being. 
D)  is less likely to promote general economic well-being than a monopoly market.

Question 7

With perfect price discrimination the monopoly

Accepted Answer

A)  eliminates all price discrimination by charging each customer the same price. 
B)  charges each customer an amount equal to the monopolist's marginal cost of production. 
C)  eliminates deadweight loss. 
D)  eliminates profits and increases consumer surplus. 
A)  eliminates all price discrimination by charging each customer the same price. 
B)  charges each customer an amount equal to the monopolist's marginal cost of production. 
C)  eliminates deadweight loss. 
D)  eliminates profits and increases consumer surplus.

Question 8

When a natural monopoly exists,it is

Accepted Answer

A)  always cost effective for government-owned firms to produce the product. 
B)  never cost effective for one firm to produce the product. 
C)  always cost effective for two or more private firms to produce the product. 
D)  never cost effective for two or more private firms to produce the product. 
A)  always cost effective for government-owned firms to produce the product. 
B)  never cost effective for one firm to produce the product. 
C)  always cost effective for two or more private firms to produce the product. 
D)  never cost effective for two or more private firms to produce the product.

Question 9

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

Accepted Answer

A)  marginal cost and demand curves. 
B)  average total cost and demand curves. 
C)  marginal revenue and average total cost curves. 
D)  marginal revenue and marginal cost curves. 
A)  marginal cost and demand curves. 
B)  average total cost and demand curves. 
C)  marginal revenue and average total cost curves. 
D)  marginal revenue and marginal cost curves.

Question 10

How does a competitive market compare to a monopoly that engages in perfect price discrimination?

Accepted Answer

A)  In both cases,total social welfare is the same. 
B)  Total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly. 
C)  In both cases,some potentially mutually beneficial trades do not occur. 
D)  Consumer surplus is the same in both cases. 
A)  In both cases,total social welfare is the same. 
B)  Total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly. 
C)  In both cases,some potentially mutually beneficial trades do not occur. 
D)  Consumer surplus is the same in both cases.

Question 11

Figure 15-2        
-Refer to Figure 15-2.Which of the following statements is correct?

Accepted Answer

A)  Panel C represents the typical demand curve for a perfectly competitive industry. 
B)  Panel B represents the typical demand curve for a monopoly. 
C)  Panel B represents the typical demand curve for a perfectly competitive firm. 
D)  All of the above are correct. 
A)  Panel C represents the typical demand curve for a perfectly competitive industry. 
B)  Panel B represents the typical demand curve for a monopoly. 
C)  Panel B represents the typical demand curve for a perfectly competitive firm. 
D)  All of the above are correct.

Question 12

Assume that a monopolist decides to maximize revenue rather than profit.How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly,should you maximize profits or maximize revenue? Explain your answer.

Accepted Answer

A revenue maximizer operates where MR =

Question 13

Figure 15-4  
-Refer to Figure 15-4.Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

Accepted Answer

A)  (ii)only 
B)  (i)or (ii)only 
C)  (i)only 
D)  (i),(ii),or (iii)only 
A)  (ii)only 
B)  (i)or (ii)only 
C)  (i)only 
D)  (i),(ii),or (iii)only

Question 14

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an example of price discrimination?

Accepted Answer

A)  A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B)  A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C)  A local pizza chain offers a "buy three get one free" deal. 
D)  An ice cream parlor charges a higher price for ice cream than for sherbet. 
A)  A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B)  A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C)  A local pizza chain offers a "buy three get one free" deal. 
D)  An ice cream parlor charges a higher price for ice cream than for sherbet.

Question 16

Table 15-4
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-4.The marginal cost of the fourth unit is

Accepted Answer

A)  $7. 
B)  $12. 
C)  $25. 
D)  $60. 
A)  $7. 
B)  $12. 
C)  $25. 
D)  $60.

Question 17

Figure 15-4  
-Refer to Figure 15-4.The marginal cost curve for a monopoly firm is depicted by curve

Accepted Answer

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

Question 18

Figure 15-4  
-Refer to Figure 15-4.If the monopoly firm wants to maximize its profit,it should operate at a level of output equal to

Accepted Answer

A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q4. 
A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q4.

Question 19

Financial aid to college students,quantity discounts,and senior citizen discounts are all examples of

Accepted Answer

A)  consumer surplus. 
B)  deadweight loss. 
C)  price discrimination. 
D)  nonprofit pricing strategies. 
A)  consumer surplus. 
B)  deadweight loss. 
C)  price discrimination. 
D)  nonprofit pricing strategies.

Question 20

Since natural monopolies have a declining average cost curve,regulating natural monopolies by setting price equal to marginal cost would

Accepted Answer

A)  cause the monopolist to operate at a loss. 
B)  result in a less than optimal total surplus. 
C)  maximize producer surplus. 
D)  result in higher profits for the monopoly. 
A)  cause the monopolist to operate at a loss. 
B)  result in a less than optimal total surplus. 
C)  maximize producer surplus. 
D)  result in higher profits for the monopoly.

Exam 15: Monopoly

Figure 15-6 -Refer to Figure 15-6.If the monopoly operates at an output level less than Q0,then an increase in output toward (but not exceeding)Q0 would

Figure 15-12 -Refer to Figure 15-12.If the monopoly firm is not allowed to price discriminate,then the deadweight loss amounts to

Compared to the monopoly outcome with a single price,imperfect price discrimination

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 cost of the 6th shirt?

Which of the following can defeat the profit-maximizing strategy of price discrimination?

A perfectly competitive market

With perfect price discrimination the monopoly

When a natural monopoly exists,it is

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

How does a competitive market compare to a monopoly that engages in perfect price discrimination?

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Figure 15-4 -Refer to Figure 15-4.Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Which of the following is not an example of price discrimination?

Table 15-4 Consider the following demand and cost information for a monopoly. -Refer to Table 15-4.The marginal cost of the fourth unit is

Figure 15-4 -Refer to Figure 15-4.The marginal cost curve for a monopoly firm is depicted by curve

Figure 15-4 -Refer to Figure 15-4.If the monopoly firm wants to maximize its profit,it should operate at a level of output equal to

Financial aid to college students,quantity discounts,and senior citizen discounts are all examples of

Since natural monopolies have a declining average cost curve,regulating natural monopolies by setting price equal to marginal cost would

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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