Question 1

When there are economies of scale over the relevant range of output for a monopoly, the monopoly

Accepted Answer

A)  is a natural monopoly. 
B)  is a government-granted monopoly. 
C)  has monopoly power due to the ownership of a patent or copyright. 
D)  has monopoly power due to the ownership of a key production resource. 
A)  is a natural monopoly. 
B)  is a government-granted monopoly. 
C)  has monopoly power due to the ownership of a patent or copyright. 
D)  has monopoly power due to the ownership of a key production resource.

Question 2

When a firm has a natural monopoly, the firm's

Accepted Answer

A)  marginal cost always exceeds its average total cost. 
B)  total cost curve is horizontal. 
C)  average total cost curve is downward sloping. 
D)  marginal cost curve must lie above the firm's average total cost curve. 
A)  marginal cost always exceeds its average total cost. 
B)  total cost curve is horizontal. 
C)  average total cost curve is downward sloping. 
D)  marginal cost curve must lie above the firm's average total cost curve.

Question 3

Which of the following is not a characteristic of a monopoly?

Accepted Answer

A)  barriers to entry 
B)  one seller 
C)  one buyer 
D)  a product without close substitutes 
A)  barriers to entry 
B)  one seller 
C)  one buyer 
D)  a product without close substitutes

Question 4

A monopolist's profits with price discrimination will be

Accepted Answer

A)  lower than if the firm charged a single, profit-maximizing price 
B)  the same as if the firm charged a single, profit-maximizing price. 
C)  higher than if the firm charged just one price because the firm will capture more consumer surplus. 
D)  higher than if the firm charged a single price because the costs of selling the good will be lower. 
A)  lower than if the firm charged a single, profit-maximizing price 
B)  the same as if the firm charged a single, profit-maximizing price. 
C)  higher than if the firm charged just one price because the firm will capture more consumer surplus. 
D)  higher than if the firm charged a single price because the costs of selling the good will be lower.

Question 5

Table 15-6
A monopolist faces the following demand curve:
  
-Refer to Table 15-6. What is the marginal revenue from the sale of the 2nd unit?

Accepted Answer

A)  $3 
B) $3 
C) $9 
D) $24 
A)  $3 
B) $3 
C) $9 
D) $24

Question 6

Figure 15-15  
-Refer to Figure 15-15. To maximize total surplus, a benevolent social planner would choose which of the following outcomes?

Accepted Answer

A)  Q = 30 and P = 30 
B)  Q = 30 and P = 60 
C)  Q = 45 and P = 45 
D)  Q = 60 and P = 30 
A)  Q = 30 and P = 30 
B)  Q = 30 and P = 60 
C)  Q = 45 and P = 45 
D)  Q = 60 and P = 30

Question 7

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

Accepted Answer

A)  a loss in total welfare. 
B)  a transfer of benefits from the buyer to the seller. 
C)  the higher marginal costs incurred by the monopolists in comparison to competitive firms. 
D)  All of the above are correct. 
A)  a loss in total welfare. 
B)  a transfer of benefits from the buyer to the seller. 
C)  the higher marginal costs incurred by the monopolists in comparison to competitive firms. 
D)  All of the above are correct.

Question 8

Patents, copyrights, and trademarks

Accepted Answer

A)  are examples of government-created monopolies. 
B)  allow their owners to reduce the costs of what they produce. 
C)  generate more revenue for the government than they cost consumers in the form of higher prices. 
D)  All of the above are correct. 
A)  are examples of government-created monopolies. 
B)  allow their owners to reduce the costs of what they produce. 
C)  generate more revenue for the government than they cost consumers in the form of higher prices. 
D)  All of the above are correct.

Question 9

Scenario 15-9
Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000.
-Refer to Scenario 15-9. How much profit will the museum earn if it engages in price discrimination?

Accepted Answer

A)  $800 
B)  $1,200 
C)  $1,600 
D)  $2,800 
A)  $800 
B)  $1,200 
C)  $1,600 
D)  $2,800

Question 10

Table 15-3
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-3. The maximum profit this monopolist can earn is

Accepted Answer

A)  $15. 
B)  $5. 
C)  $16. 
D)  $28. 
A)  $15. 
B)  $5. 
C)  $16. 
D)  $28.

Question 11

The distribution of water to residents of a town and an infrequently used bridge are examples of

Accepted Answer

The answer of The distribution of water to residents of...

Question 12

When a monopolist decreases the price of its good, consumers

Accepted Answer

A)  continue to buy the same amount. 
B)  buy more. 
C)  buy less. 
D)  may buy more or less, depending on the price elasticity of demand. 
A)  continue to buy the same amount. 
B)  buy more. 
C)  buy less. 
D)  may buy more or less, depending on the price elasticity of demand.

Question 13

The defining characteristic of a natural monopoly is

Accepted Answer

A)  constant marginal cost over the relevant range of output. 
B)  economies of scale over the relevant range of output. 
C)  constant returns to scale over the relevant range of output. 
D)  diseconomies of scale over the relevant range of output. 
A)  constant marginal cost over the relevant range of output. 
B)  economies of scale over the relevant range of output. 
C)  constant returns to scale over the relevant range of output. 
D)  diseconomies of scale over the relevant range of output.

Question 14

Figure 15-22  
-Refer to Figure 15-22. Which is more efficient, single price profit maximization or perfect price discrimination?

Accepted Answer

perfect pr

Question 15

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 16

A monopolist maximizes profits by

Accepted Answer

A)  producing an output level where marginal revenue equals marginal cost. 
B)  charging a price that is greater than marginal revenue. 
C)  earning a profit of (P - M
C)  x Q. 
D)  Both a and b are correct. 
A)  producing an output level where marginal revenue equals marginal cost. 
B)  charging a price that is greater than marginal revenue. 
C)  earning a profit of (P - M
C)  x Q. 
D)  Both a and b are correct.

Question 17

Monopoly firms have

Accepted Answer

A)  downward-sloping demand curves, so they can sell as much output as they desire at the market price. 
B)  downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve. 
C)  horizontal demand curves, so they can sell as much output as they desire at the market price. 
D)  horizontal demand curves, so they can sell only a limited quantity of output at each price. 
A)  downward-sloping demand curves, so they can sell as much output as they desire at the market price. 
B)  downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve. 
C)  horizontal demand curves, so they can sell as much output as they desire at the market price. 
D)  horizontal demand curves, so they can sell only a limited quantity of output at each price.

Question 18

State one benefit of government-granted monopolies like patents and copyrights.

Accepted Answer

increased

Question 19

Table 15-5
A monopolist faces the following demand curve:
  
-Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production?

Accepted Answer

A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units 
A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units

Question 20

When the government creates a monopoly, the social loss may include

Accepted Answer

A)  declining marginal costs. 
B)  the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. 
C)  excessive monopoly profits. 
D)  diminishing marginal revenue. 
A)  declining marginal costs. 
B)  the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. 
C)  excessive monopoly profits. 
D)  diminishing marginal revenue.

When there are economies of scale over the relevant range of output for a monopoly, the monopoly

When a firm has a natural monopoly, the firm's

Which of the following is not a characteristic of a monopoly?

A monopolist's profits with price discrimination will be

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. What is the marginal revenue from the sale of the 2nd unit?

Figure 15-15 -Refer to Figure 15-15. To maximize total surplus, a benevolent social planner would choose which of the following outcomes?

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

Patents, copyrights, and trademarks

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3. The maximum profit this monopolist can earn is

The distribution of water to residents of a town and an infrequently used bridge are examples of

When a monopolist decreases the price of its good, consumers

The defining characteristic of a natural monopoly is

Figure 15-22 -Refer to Figure 15-22. Which is more efficient, single price profit maximization or perfect price discrimination?

A monopolist maximizes profits by

Monopoly firms have

State one benefit of government-granted monopolies like patents and copyrights.

Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production?

When the government creates a monopoly, the social loss may include

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

Filters

Exam 15: Monopoly

When there are economies of scale over the relevant range of output for a monopoly, the monopoly

When a firm has a natural monopoly, the firm's

Which of the following is not a characteristic of a monopoly?

A monopolist's profits with price discrimination will be

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. What is the marginal revenue from the sale of the 2nd unit?

Figure 15-15 -Refer to Figure 15-15. To maximize total surplus, a benevolent social planner would choose which of the following outcomes?

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

Patents, copyrights, and trademarks

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3. The maximum profit this monopolist can earn is

The distribution of water to residents of a town and an infrequently used bridge are examples of

When a monopolist decreases the price of its good, consumers

The defining characteristic of a natural monopoly is

Figure 15-22 -Refer to Figure 15-22. Which is more efficient, single price profit maximization or perfect price discrimination?

A monopolist maximizes profits by

Monopoly firms have

State one benefit of government-granted monopolies like patents and copyrights.

Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production?

When the government creates a monopoly, the social loss may include

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

Filters