Question 1

Government intervention always reduces monopoly deadweight loss.

Accepted Answer

A) True 
 B)False

Question 2

Figure 15-5  
-Refer to Figure 15-5.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)  P4 x Q3. 
B)  (P4-P2)x Q3. 
C)  (P4-P1)x Q3. 
D)  (P5-P0)x Q1. 
A)  P4 x Q3. 
B)  (P4-P2)x Q3. 
C)  (P4-P1)x Q3. 
D)  (P5-P0)x Q1.

Question 3

For a monopoly firm,the shape and position of the demand curve play a role in determining

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

Which of the following is not a reason for the existence of a monopoly?

Accepted Answer

A)  sole ownership of a key resource 
B)  patents 
C)  copyrights 
D)  diseconomies of scale 
A)  sole ownership of a key resource 
B)  patents 
C)  copyrights 
D)  diseconomies of scale

Question 5

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

Accepted Answer

A) True 
 B)False

Question 6

Scenario 15-2
A monopoly firm maximizes its profit by producing Q = 500 units of output.At that level of output,its marginal revenue is $30,its average revenue is $60,and its average total cost is $34.
-Refer to Scenario 15-2.At Q = 500,the firm's profit is

Accepted Answer

A)  $13,000. 
B)  $15,000. 
C)  $17,000. 
D)  $30,000. 
A)  $13,000. 
B)  $15,000. 
C)  $17,000. 
D)  $30,000.

Question 7

For a monopoly,the level of output at which marginal revenue equals zero is also the level of output at which

Accepted Answer

A)  average revenue is zero. 
B)  profit is maximized. 
C)  total revenue is maximized. 
D)  marginal cost is zero. 
A)  average revenue is zero. 
B)  profit is maximized. 
C)  total revenue is maximized. 
D)  marginal cost is zero.

Question 8

Figure 15-3  
-Refer to Figure 15-3.What area measures the monopolist's profit?

Accepted Answer

A)  (B-F)*K 
B)  (A-H)*J 
C)  (B-G)*K 
D)  0.5[(B-F)*(L-K)] 
A)  (B-F)*K 
B)  (A-H)*J 
C)  (B-G)*K 
D)  0.5[(B-F)*(L-K)]

Question 9

The social cost of a monopoly is equal to its

Accepted Answer

A)  economic profit. 
B)  fixed cost. 
C)  dead weight loss. 
D)  variable cost. 
A)  economic profit. 
B)  fixed cost. 
C)  dead weight loss. 
D)  variable cost.

Question 10

If a monopolist's marginal costs increase by $1 for all levels of output,then

Accepted Answer

A)  the monopoly price will rise by $1. 
B)  the monopoly price will rise by more than $1. 
C)  the monopoly price will rise by less than $1. 
D)  there is no change in the monopoly price and profits fall. 
A)  the monopoly price will rise by $1. 
B)  the monopoly price will rise by more than $1. 
C)  the monopoly price will rise by less than $1. 
D)  there is no change in the monopoly price and profits fall.

Question 11

In a market characterized by monopoly,the market demand curve is

Accepted Answer

A)  upward sloping. 
B)  horizontal. 
C)  downward sloping. 
D)  vertical. 
A)  upward sloping. 
B)  horizontal. 
C)  downward sloping. 
D)  vertical.

Question 12

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Accepted Answer

The private monopolist is governed by th

Question 13

A monopoly market is characterized by

Accepted Answer

A)  many buyers and sellers. 
B)  "natural" products. 
C)  barriers to entry. 
D)  a Nash equilibrium. 
A)  many buyers and sellers. 
B)  "natural" products. 
C)  barriers to entry. 
D)  a Nash equilibrium.

Question 14

The proper level of government intervention is unclear when dealing with a monopoly.

Accepted Answer

A) True 
 B)False

Question 15

A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

Accepted Answer

A) True 
 B)False

Question 16

Figure 15-12  
-Refer to Figure 15-12.If there are no fixed costs of production,monopoly profit without price discrimination equals

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 17

Goods that do not have close substitutes have downward-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 18

Patent and copyright laws encourage

Accepted Answer

A)  creative activity. 
B)  research and development. 
C)  competition among firms. 
D)  Both a and b are correct. 
A)  creative activity. 
B)  research and development. 
C)  competition among firms. 
D)  Both a and b are correct.

Question 19

Figure 15-4  
-Refer to Figure 15-4.Profit will be maximized by charging a price equal to

Accepted Answer

A)  P1. 
B)  P2. 
C)  P3. 
D)  P4. 
A)  P1. 
B)  P2. 
C)  P3. 
D)  P4.

Question 20

Figure 15-5  
-Refer to Figure 15-5.Profit on a typical unit sold for a profit-maximizing monopoly would equal

Accepted Answer

A)  P5-P0. 
B)  P4-P2. 
C)  P4-P1. 
D)  P4-P3. 
A)  P5-P0. 
B)  P4-P2. 
C)  P4-P1. 
D)  P4-P3.

Exam 15: Monopoly

Government intervention always reduces monopoly deadweight loss.

Figure 15-5 -Refer to Figure 15-5.A profit-maximizing monopoly's profit is equal to

For a monopoly firm,the shape and position of the demand curve play a role in determining

Which of the following is not a reason for the existence of a monopoly?

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

Scenario 15-2 A monopoly firm maximizes its profit by producing Q = 500 units of output.At that level of output,its marginal revenue is $30,its average revenue is $60,and its average total cost is $34. -Refer to Scenario 15-2.At Q = 500,the firm's profit is

For a monopoly,the level of output at which marginal revenue equals zero is also the level of output at which

Figure 15-3 -Refer to Figure 15-3.What area measures the monopolist's profit?

The social cost of a monopoly is equal to its

If a monopolist's marginal costs increase by $1 for all levels of output,then

In a market characterized by monopoly,the market demand curve is

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

A monopoly market is characterized by

The proper level of government intervention is unclear when dealing with a monopoly.

A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

Figure 15-12 -Refer to Figure 15-12.If there are no fixed costs of production,monopoly profit without price discrimination equals

Goods that do not have close substitutes have downward-sloping demand curves.

Patent and copyright laws encourage

Figure 15-4 -Refer to Figure 15-4.Profit will be maximized by charging a price equal to

Figure 15-5 -Refer to Figure 15-5.Profit on a typical unit sold for a profit-maximizing monopoly would equal

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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