Question 1

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 firm,and Panel B represents the typical demand curve for a monopoly. 
B)  Panel B represents the typical demand curve for a perfectly competitive firm,and Panel C represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive firm,and Panel B represents the typical demand curve for a monopoly. 
D)  Panel C represents the typical demand curve for a perfectly competitive firm,and Panel D represents the typical demand curve for a monopoly. 
A)  Panel C represents the typical demand curve for a perfectly competitive firm,and Panel B represents the typical demand curve for a monopoly. 
B)  Panel B represents the typical demand curve for a perfectly competitive firm,and Panel C represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive firm,and Panel B represents the typical demand curve for a monopoly. 
D)  Panel C represents the typical demand curve for a perfectly competitive firm,and Panel D represents the typical demand curve for a monopoly.

Question 2

Because a monopolist must lower its price in order to sell another unit of output,

Accepted Answer

A)  marginal revenue is less than price. 
B)  long-term economic profits will be zero. 
C)  total revenue increases as price increases. 
D)  average revenue is less than price. 
A)  marginal revenue is less than price. 
B)  long-term economic profits will be zero. 
C)  total revenue increases as price increases. 
D)  average revenue is less than price.

Question 3

Granting a pharmaceutical company a patent for a new medicine will lead to

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

When a firm's average total cost curve continually declines,the firm is a

Accepted Answer

A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct. 
A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct.

Question 5

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

Accepted Answer

A) True 
 B)False

Question 6

Scenario 15-6
An airline knows that there are two types of travelers: business travelers and vacationers.For a particular flight,there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket.There are 150 seats available on the plane.Suppose the cost to the airline of providing the flight is $20,000,which includes the cost of the pilots,flight attendants,fuel,etc.
-Refer to Scenario 15-6.How much profit will the airline earn if it sets the price of a ticket at $600?

Accepted Answer

A)  -$5,000 
B)  $15,000 
C)  $40,000 
D)  $60,000 
A)  -$5,000 
B)  $15,000 
C)  $40,000 
D)  $60,000

Question 7

Scenario 15-1
Consider a transportation corporation named C.R.Evans that has just completed the development of a new subway system in a medium-sized town in the Northwest.Currently,there are plenty of seats on the subway,and it is never crowded.Its capacity far exceeds the needs of the city.After just a few years of operation,the shareholders of C.R.Evans experienced incredible rates of return on their investment,due to the profitability of the corporation.
-Refer to Scenario 15-1.C.R.Evans will continue to be a monopolist in the subway transportation industry only if

Accepted Answer

A)  population growth leads to an overcrowding of the subway cars. 
B)  there are no new entrants to the market. 
C)  demand for transportation services decreases. 
D)  All of the above are correct. 
A)  population growth leads to an overcrowding of the subway cars. 
B)  there are no new entrants to the market. 
C)  demand for transportation services decreases. 
D)  All of the above are correct.

Question 8

A monopolist's supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 9

Figure 15-7  
-Refer to Figure 15-7.What is the monopoly price and quantity?

Accepted Answer

A)  price = F;quantity = A 
B)  price = G;quantity = B 
C)  price = G;quantity = A 
D)  price = D;quantity = A 
A)  price = F;quantity = A 
B)  price = G;quantity = B 
C)  price = G;quantity = A 
D)  price = D;quantity = A

Question 10

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus. 
A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus.

Question 11

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Accepted Answer

A)  profit-maximizing monopoly. 
B)  producer of externalities. 
C)  revenue-maximizing monopoly. 
D)  natural monopoly. 
A)  profit-maximizing monopoly. 
B)  producer of externalities. 
C)  revenue-maximizing monopoly. 
D)  natural monopoly.

Question 12

What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10.The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and marginal revenue is $5.The socially efficient level of production is 110 units.The demand curve is linear and downward sloping,and the marginal cost curve is constant.

Accepted Answer

1/2*(110-1

Question 13

Scenario 15-3
Suppose a monopolist has a demand curve that can be expressed as P=90-Q.The monopolist's marginal revenue curve can be expressed as MR=90-2Q.The monopolist has constant marginal costs and average total costs of $10.
-Refer to Scenario 15-3.The profit-maximizing monopolist will produce an output level of

Accepted Answer

A)  80 units. 
B)  40 units. 
C)  20 units. 
D)  10 units. 
A)  80 units. 
B)  40 units. 
C)  20 units. 
D)  10 units.

Question 14

Allowing an inventor to have the exclusive rights to market her new invention will lead to

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 15

Table 15-1
  
-Refer to Table 15-1.If the monopolist sells 8 units of its product,how much total revenue will it receive from the sale?

Accepted Answer

A)  14 
B)  40 
C)  112 
D)  164 
A)  14 
B)  40 
C)  112 
D)  164

Question 16

Figure 15-8  
-Refer to Figure 15-8.To maximize its profit,a monopolist would choose which of the following outcomes?

Accepted Answer

A)  100 units of output and a price of $10 per unit 
B)  100 units of output and a price of $20 per unit 
C)  150 units of output and a price of $15 per unit 
D)  200 units of output and a price of $20 per unit 
A)  100 units of output and a price of $10 per unit 
B)  100 units of output and a price of $20 per unit 
C)  150 units of output and a price of $15 per unit 
D)  200 units of output and a price of $20 per unit

Question 17

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Accepted Answer

A)  resource monopolies. 
B)  natural monopolies. 
C)  government-created monopolies. 
D)  breaking up monopolies into smaller firms. 
A)  resource monopolies. 
B)  natural monopolies. 
C)  government-created monopolies. 
D)  breaking up monopolies into smaller firms.

Question 18

Table 15-6
Dreher's Designer Shirt Company,a monopolist,has the following cost and revenue information.Assume that Dreher's is able to engage in perfect price discrimination.
  
-Refer to Table 15-6.If the monopolist can engage in perfect price discrimination,what is the marginal revenue from selling the 8th shirt?

Accepted Answer

A)  $45 
B)  $60 
C)  $80 
D)  $95 
A)  $45 
B)  $60 
C)  $80 
D)  $95

Question 19

Which of the following statements is not correct?

Accepted Answer

A)  Consumers will likely benefit in the form of lower prices from buying a product made by a natural monopoly than if the market were served by several firms. 
B)  Monopolists typically charge higher prices than competitive firms. 
C)  Monopolists typically produce larger quantities of output than competitive firms. 
D)  Consumers may benefit from monopolies if the firms invest their higher profits into something that benefits society such as medical research. 
A)  Consumers will likely benefit in the form of lower prices from buying a product made by a natural monopoly than if the market were served by several firms. 
B)  Monopolists typically charge higher prices than competitive firms. 
C)  Monopolists typically produce larger quantities of output than competitive firms. 
D)  Consumers may benefit from monopolies if the firms invest their higher profits into something that benefits society such as medical research.

Question 20

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 8th shirt?

Accepted Answer

A)  $10 
B)  $20 
C)  $40 
D)  $90 
A)  $10 
B)  $20 
C)  $40 
D)  $90

Exam 15: Monopoly

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

Because a monopolist must lower its price in order to sell another unit of output,

Granting a pharmaceutical company a patent for a new medicine will lead to

When a firm's average total cost curve continually declines,the firm is a

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

A monopolist's supply curve is vertical.

Figure 15-7 -Refer to Figure 15-7.What is the monopoly price and quantity?

The amount that producers receive for a good minus their costs of producing it equals

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Allowing an inventor to have the exclusive rights to market her new invention will lead to

Table 15-1 -Refer to Table 15-1.If the monopolist sells 8 units of its product,how much total revenue will it receive from the sale?

Figure 15-8 -Refer to Figure 15-8.To maximize its profit,a monopolist would choose which of the following outcomes?

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Which of the following statements is not correct?

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 8th shirt?

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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