Question 1

Allocative efficiency occurs where:

Accepted Answer

A)  the price of a good is less than the marginal cost of producing it. 
B)  the price of a good is greater than the marginal cost of producing it. 
C)  the price of a good is equal to the marginal cost of producing it. 
D)  the greatest quantity of output is available for sale. 
A)  the price of a good is less than the marginal cost of producing it. 
B)  the price of a good is greater than the marginal cost of producing it. 
C)  the price of a good is equal to the marginal cost of producing it. 
D)  the greatest quantity of output is available for sale.

Question 2

If a monopoly firm is at a level of output where MC equals $10 and is increasing,MR equals $10,and average variable cost equals $9.To maximize profits,the firm should:

Accepted Answer

A)  increase both output and price. 
B)  increase output but decrease the price. 
C)  decrease output and increase the price. 
D)  not change either the output or the price. 
A)  increase both output and price. 
B)  increase output but decrease the price. 
C)  decrease output and increase the price. 
D)  not change either the output or the price.

Question 3

Which of the following is true about price discrimination?

Accepted Answer

A)  When there are a number of competing firms, price discrimination is less likely because competitors tend to undercut the high prices charged those discriminated against. 
B)  A profit-maximizing seller will charge a higher price for those with a greater willingness to pay, and a lower price for demanders with a lower willingness to pay. 
C)  Price differentials between groups will erode if reselling is easy. 
D)  All of the above are true of price discrimination. 
A)  When there are a number of competing firms, price discrimination is less likely because competitors tend to undercut the high prices charged those discriminated against. 
B)  A profit-maximizing seller will charge a higher price for those with a greater willingness to pay, and a lower price for demanders with a lower willingness to pay. 
C)  Price differentials between groups will erode if reselling is easy. 
D)  All of the above are true of price discrimination.

Question 4

One difficulty associated with average cost pricing regulation of natural monopolies is that firms have little or no incentive to minimize production costs.

Accepted Answer

A) True 
 B)False

Question 5

When the firm is able to perfectly price discriminate,each unit is sold at its:

Accepted Answer

A)  peak load price. 
B)  reservation price. 
C)  cost price. 
D)  market price. 
A)  peak load price. 
B)  reservation price. 
C)  cost price. 
D)  market price.

Question 6

If a monopolist is able to price discriminate:

Accepted Answer

A)  consumer surplus is increased. 
B)  the welfare loss from monopoly is increased. 
C)  producer surplus is decreased. 
D)  some consumer surplus and deadweight losses are transformed into monopoly profits. 
A)  consumer surplus is increased. 
B)  the welfare loss from monopoly is increased. 
C)  producer surplus is decreased. 
D)  some consumer surplus and deadweight losses are transformed into monopoly profits.

Question 7

Which of the following best explains why marginal revenue for a monopolist is less than the sales price?

Accepted Answer

A)  To sell more units, the monopolist must reduce price on all units sold. 
B)  As the monopolist expands output, the average total cost of production declines. 
C)  The monopolist charges each consumer the highest possible price. 
D)  When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist. 
A)  To sell more units, the monopolist must reduce price on all units sold. 
B)  As the monopolist expands output, the average total cost of production declines. 
C)  The monopolist charges each consumer the highest possible price. 
D)  When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

Question 8

The following represents a portion of the demand schedule faced by a monopoly firm.   The marginal revenue of the third unit of output equals:

Accepted Answer

A)  $12. 
B)  $10. 
C)  $8. 
D)  $1. 
A)  $12. 
B)  $10. 
C)  $8. 
D)  $1.

Question 9

If marginal revenue on the tenth unit of output equals $4 for a non-discriminating,profit-maximizing monopolist,then price:

Accepted Answer

A)  equals $4. 
B)  is less than $4. 
C)  is greater than $4. 
D)  must be equal to average total cost. 
A)  equals $4. 
B)  is less than $4. 
C)  is greater than $4. 
D)  must be equal to average total cost.

Allocative efficiency occurs where:

If a monopoly firm is at a level of output where MC equals $10 and is increasing,MR equals $10,and average variable cost equals $9.To maximize profits,the firm should:

Which of the following is true about price discrimination?

One difficulty associated with average cost pricing regulation of natural monopolies is that firms have little or no incentive to minimize production costs.

When the firm is able to perfectly price discriminate,each unit is sold at its:

If a monopolist is able to price discriminate:

Which of the following best explains why marginal revenue for a monopolist is less than the sales price?

The following represents a portion of the demand schedule faced by a monopoly firm. The marginal revenue of the third unit of output equals:

If marginal revenue on the tenth unit of output equals $4 for a non-discriminating,profit-maximizing monopolist,then price:

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

Exam 13: Monopoly and Antitrust

Allocative efficiency occurs where:

If a monopoly firm is at a level of output where MC equals $10 and is increasing,MR equals $10,and average variable cost equals $9.To maximize profits,the firm should:

Which of the following is true about price discrimination?

One difficulty associated with average cost pricing regulation of natural monopolies is that firms have little or no incentive to minimize production costs.

When the firm is able to perfectly price discriminate,each unit is sold at its:

If a monopolist is able to price discriminate:

Which of the following best explains why marginal revenue for a monopolist is less than the sales price?

The following represents a portion of the demand schedule faced by a monopoly firm. The marginal revenue of the third unit of output equals:

If marginal revenue on the tenth unit of output equals $4 for a non-discriminating,profit-maximizing monopolist,then price:

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters