Question 1

A monopoly firm will never operate in the _______ range of the _______ curve.

Accepted Answer

A)  inelastic; supply 
B)  elastic; demand 
C)  inelastic; demand 
D)  elastic; supply 
A)  inelastic; supply 
B)  elastic; demand 
C)  inelastic; demand 
D)  elastic; supply C

Question 2

Use the following to answer question(s): Monopoly Model
  
-(Exhibit: Monopoly Model) When the firm is in equilibrium, its profit is the area of rectangle:

Accepted Answer

A)  SPDB. 
B)  IPDH. 
C)  ISBH. 
D)  0PDJ. 
A)  SPDB. 
B)  IPDH. 
C)  ISBH. 
D)  0PDJ. A

Question 3

Maximum total economic profits are price minus ATC times the quantity of output where MR = MC for the monopoly firm.

Accepted Answer

A) True 
 B)False  True

Question 4

In contrast to a monopoly firm, a perfectly competitive firm:

Accepted Answer

A)  is a price taker. 
B)  faces a downward-sloping demand curve. 
C)  has only a moderate degree of monopoly power. 
D)  produces more than the efficient level of output. 
A)  is a price taker. 
B)  faces a downward-sloping demand curve. 
C)  has only a moderate degree of monopoly power. 
D)  produces more than the efficient level of output.

Question 5

A statement that best reflects an evaluation of monopoly firms is that:

Accepted Answer

A)  they are economically efficient. 
B)  they have little or no market power. 
C)  consumers are given more choices, lower costs, and higher quality. 
D)  none of the above is true. 
A)  they are economically efficient. 
B)  they have little or no market power. 
C)  consumers are given more choices, lower costs, and higher quality. 
D)  none of the above is true.

Question 6

A demand curve that is downward sloping will ensure that:

Accepted Answer

A) P = MR. B) P > MR. C) P < MR. D) P = MC. A) P = MR. B) P > MR. C) P < MR. D) P = MC.

Question 7

Because of monopoly, consumers typically have:

Accepted Answer

A)  fewer choices. 
B)  higher costs. 
C)  lower quality. 
D)  all of the above. 
A)  fewer choices. 
B)  higher costs. 
C)  lower quality. 
D)  all of the above.

Question 8

Use the following to answer question(s): Demand, Elasticity, and Total Revenue
  
-(Exhibit: Demand, Elasticity, and Total Revenue) When price is P and quantity is Q in Panel (a), which of the following is (are) true?

Accepted Answer

A)  An increase in price will increase total revenue. 
B)  A decrease in price will increase total revenue. 
C)  P x Q is the maximum amount TR can be. 
D)  B and C are true. 
A)  An increase in price will increase total revenue. 
B)  A decrease in price will increase total revenue. 
C)  P x Q is the maximum amount TR can be. 
D)  B and C are true.

Question 9

A _______ price charged by a monopoly than would be the case if P = MC _______ consumer surplus.

Accepted Answer

A)  lower; decreases 
B)  higher; reduces 
C)  higher; increases 
D)  None of the above is true. 
A)  lower; decreases 
B)  higher; reduces 
C)  higher; increases 
D)  None of the above is true.

Question 10

In the _______ range of demand, total revenue _______ with an increase in price.

Accepted Answer

A)  elastic; decreases 
B)  elastic; does not change 
C)  inelastic; decreases 
D)  inelastic; does not change 
A)  elastic; decreases 
B)  elastic; does not change 
C)  inelastic; decreases 
D)  inelastic; does not change

Question 11

Which of the following is (are) true?

Accepted Answer

A)  If MR = 0, the price elasticity of demand is also equal to zero. 
B)  If MR  0, then the price elasticity of demand is in the elastic range. 
D)  B and C are true. 
A)  If MR = 0, the price elasticity of demand is also equal to zero. 
B)  If MR  0, then the price elasticity of demand is in the elastic range. 
D)  B and C are true.

Question 12

A profit-maximizing firm finds that its marginal costs have risen by $10 per unit.In response to the increase in costs it will change its price and it will experience:

Accepted Answer

A)  an increase in its total revenue. 
B)  a decrease in its total revenue. 
C)  no change in its total revenue. 
D)  It is not possible to predict the impact of the change on total revenue. 
A)  an increase in its total revenue. 
B)  a decrease in its total revenue. 
C)  no change in its total revenue. 
D)  It is not possible to predict the impact of the change on total revenue.

Question 13

Use the following to answer question(s): Short-Run Monopoly
  
-(Exhibit: Short-Run Monopoly) The profit-maximizing quantity of output is quantity:

Accepted Answer

A)  Q. 
B)  R. 
C)  S. 
D)  T. 
A)  Q. 
B)  R. 
C)  S. 
D)  T.

Question 14

By adhering to the MC = MR principle, a monopoly will assure itself:

Accepted Answer

A)  either maximum profits or minimum losses. 
B)  large profits. 
C)  economic profits. 
D)  no losses. 
A)  either maximum profits or minimum losses. 
B)  large profits. 
C)  economic profits. 
D)  no losses.

Question 15

Use the following to answer question(s): Computing Monopoly Profit
  
-(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _______ and will generate total economic profit of _______ .

Accepted Answer

A)  P₂; EF 
B)  P₃; the rectangle P₁P₂FG 
C)  P₃; the rectangle P₂P₃EF 
D)  P₂; FG 
A)  P₂; EF 
B)  P₃; the rectangle P₁P₂FG 
C)  P₃; the rectangle P₂P₃EF 
D)  P₂; FG

Question 16

In the _______ range of demand, total revenue _______ with an increase in quantity.

Accepted Answer

A)  elastic; increases 
B)  elastic; does not change 
C)  inelastic; increases 
D)  inelastic; does not change 
A)  elastic; increases 
B)  elastic; does not change 
C)  inelastic; increases 
D)  inelastic; does not change

Question 17

A monopoly is likely to _______ and _______ than otherwise equivalent competitive firms.

Accepted Answer

A)  produce more; charge more 
B)  produce less; charge more 
C)  produce more; charge less 
D)  produce less; charge less 
A)  produce more; charge more 
B)  produce less; charge more 
C)  produce more; charge less 
D)  produce less; charge less

Question 18

Use the following to answer question(s): Demand, Elasticity, and Total Revenue
  
-(Exhibit: Demand, Elasticity, and Total Revenue) In Panel (a), which of the following is true?

Accepted Answer

A)  Between points A and M, the price elasticity of demand is elastic. 
B)  Between points F and A, the price elasticity of demand is inelastic. 
C)  At any price other than P, total revenue will be greater. 
D)  All of the above statements are false. 
A)  Between points A and M, the price elasticity of demand is elastic. 
B)  Between points F and A, the price elasticity of demand is inelastic. 
C)  At any price other than P, total revenue will be greater. 
D)  All of the above statements are false.

Question 19

The pricing in monopoly prevents some mutually beneficial trades from taking place.The value of these unrealized mutually beneficial trades is called:

Accepted Answer

A)  sunk costs. 
B)  opportunity costs. 
C)  a deadweight loss. 
D)  inequities. 
A)  sunk costs. 
B)  opportunity costs. 
C)  a deadweight loss. 
D)  inequities.

Question 20

The profit-maximizing rule P = MC is:

Accepted Answer

A)  followed by a monopoly. 
B)  followed by a perfectly competitive firm. 
C)  a rule for any firm that wants to maximize profits. 
D)  false for all of the above. 
A)  followed by a monopoly. 
B)  followed by a perfectly competitive firm. 
C)  a rule for any firm that wants to maximize profits. 
D)  false for all of the above.

A monopoly firm will never operate in the _ range of the _ curve.

Use the following to answer question(s): Monopoly Model -(Exhibit: Monopoly Model) When the firm is in equilibrium, its profit is the area of rectangle:

Maximum total economic profits are price minus ATC times the quantity of output where MR = MC for the monopoly firm.

In contrast to a monopoly firm, a perfectly competitive firm:

A statement that best reflects an evaluation of monopoly firms is that:

A demand curve that is downward sloping will ensure that:

Because of monopoly, consumers typically have:

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) When price is P and quantity is Q in Panel (a), which of the following is (are) true?

A _ price charged by a monopoly than would be the case if P = MC _ consumer surplus.

In the _ range of demand, total revenue _ with an increase in price.

Which of the following is (are) true?

A profit-maximizing firm finds that its marginal costs have risen by $10 per unit.In response to the increase in costs it will change its price and it will experience:

Use the following to answer question(s): Short-Run Monopoly -(Exhibit: Short-Run Monopoly) The profit-maximizing quantity of output is quantity:

By adhering to the MC = MR principle, a monopoly will assure itself:

Use the following to answer question(s): Computing Monopoly Profit -(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _ and will generate total economic profit of _ .

In the _ range of demand, total revenue _ with an increase in quantity.

A monopoly is likely to _ and _ than otherwise equivalent competitive firms.

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) In Panel (a), which of the following is true?

The pricing in monopoly prevents some mutually beneficial trades from taking place.The value of these unrealized mutually beneficial trades is called:

The profit-maximizing rule P = MC is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 10: Monopoly

A monopoly firm will never operate in the _______ range of the _______ curve.

Use the following to answer question(s): Monopoly Model -(Exhibit: Monopoly Model) When the firm is in equilibrium, its profit is the area of rectangle:

Maximum total economic profits are price minus ATC times the quantity of output where MR = MC for the monopoly firm.

In contrast to a monopoly firm, a perfectly competitive firm:

A statement that best reflects an evaluation of monopoly firms is that:

A demand curve that is downward sloping will ensure that:

Because of monopoly, consumers typically have:

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) When price is P and quantity is Q in Panel (a), which of the following is (are) true?

A _______ price charged by a monopoly than would be the case if P = MC _______ consumer surplus.

In the _______ range of demand, total revenue _______ with an increase in price.

Which of the following is (are) true?

A profit-maximizing firm finds that its marginal costs have risen by $10 per unit.In response to the increase in costs it will change its price and it will experience:

Use the following to answer question(s): Short-Run Monopoly -(Exhibit: Short-Run Monopoly) The profit-maximizing quantity of output is quantity:

By adhering to the MC = MR principle, a monopoly will assure itself:

Use the following to answer question(s): Computing Monopoly Profit -(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _______ and will generate total economic profit of _______ .

In the _______ range of demand, total revenue _______ with an increase in quantity.

A monopoly is likely to _______ and _______ than otherwise equivalent competitive firms.

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) In Panel (a), which of the following is true?

The pricing in monopoly prevents some mutually beneficial trades from taking place.The value of these unrealized mutually beneficial trades is called:

The profit-maximizing rule P = MC is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

A monopoly firm will never operate in the _ range of the _ curve.

A _ price charged by a monopoly than would be the case if P = MC _ consumer surplus.

In the _ range of demand, total revenue _ with an increase in price.

Use the following to answer question(s): Computing Monopoly Profit -(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _ and will generate total economic profit of _ .

In the _ range of demand, total revenue _ with an increase in quantity.

A monopoly is likely to _ and _ than otherwise equivalent competitive firms.