Question 1

A monopoly inefficiently allocates resources by producing a smaller quantity at a higher price than if perfectly competitive firms characterized the same industry.

Accepted Answer

A) True 
 B)False

Question 2

The Case in Point on hockey teams suggested that if a sports team had a large enough stadium, it would maximize its profits by selling that quantity of tickets per game where marginal revenue was:

Accepted Answer

A)  the highest possible. 
B)  rising over the relevant range. 
C)  equal to marginal cost and both were equal to zero. 
D)  equal to total revenue. 
A)  the highest possible. 
B)  rising over the relevant range. 
C)  equal to marginal cost and both were equal to zero. 
D)  equal to total revenue.

Question 3

A profit-maximizing monopoly firm:

Accepted Answer

A)  charges a price equal to marginal revenue. 
B)  charges a price equal to marginal cost. 
C)  charges a price equal to one-half marginal cost. 
D)  none of the above is true. 
A)  charges a price equal to marginal revenue. 
B)  charges a price equal to marginal cost. 
C)  charges a price equal to one-half marginal cost. 
D)  none of the above is true.

Question 4

Use the following to answer question(s): Computing Monopoly Profit
  
-(Exhibit: Computing Monopoly Profit) When the MR curve crosses the horizontal axis:

Accepted Answer

A)  the price elasticity of demand is -1. 
B)  the price elasticity of demand is equal to zero. 
C)  total profit is maximized. 
D)  economic profit is equal to zero. 
A)  the price elasticity of demand is -1. 
B)  the price elasticity of demand is equal to zero. 
C)  total profit is maximized. 
D)  economic profit is equal to zero.

Question 5

The demand curve for a monopoly is:

Accepted Answer

A)  the sum of all the firm supply curves in the monopoly's industry. 
B)  the industry demand curve. 
C)  horizontal because no one can enter. 
D)  perfectly elastic. 
A)  the sum of all the firm supply curves in the monopoly's industry. 
B)  the industry demand curve. 
C)  horizontal because no one can enter. 
D)  perfectly elastic.

Question 6

A restricted-input monopoly is most likely to result if a single firm:

Accepted Answer

A)  is the only seller in a small town or community. 
B)  is investor owned, but granted the exclusive right by the government to operate in a market. 
C)  experiences long-run increasing economies of scale over a wide range of output. 
D)  has gained control over a strategic factor of production. 
A)  is the only seller in a small town or community. 
B)  is investor owned, but granted the exclusive right by the government to operate in a market. 
C)  experiences long-run increasing economies of scale over a wide range of output. 
D)  has gained control over a strategic factor of production.

Question 7

A firm that confronts economies of scale:

Accepted Answer

A)  at lower levels of output and then encounters diseconomies of scale at higher levels of output is a natural monopoly. 
B)  over the entire range of outputs demanded is called a natural monopoly. 
C)  at any particular level of output is called a natural monopoly. 
D)  has a continually rising long-run average cost curve. 
A)  at lower levels of output and then encounters diseconomies of scale at higher levels of output is a natural monopoly. 
B)  over the entire range of outputs demanded is called a natural monopoly. 
C)  at any particular level of output is called a natural monopoly. 
D)  has a continually rising long-run average cost curve.

Question 8

Public policies towards monopoly in the United States consists of:

Accepted Answer

A)  laws outlawing all of them. 
B)  regulation of natural monopolies. 
C)  government takeover if monopoly profit exceeds a certain level. 
D)  forcing monopoly industries to become perfectly competitive. 
A)  laws outlawing all of them. 
B)  regulation of natural monopolies. 
C)  government takeover if monopoly profit exceeds a certain level. 
D)  forcing monopoly industries to become perfectly competitive.

Question 9

The XYZ Company is a profit-maximizing firm with a monopoly in the production of pennants.The firm sells its pennants for $10 each.We can conclude that the XYZ Company is experiencing:

Accepted Answer

A)  diminishing marginal returns to its variable factor(s) of production. 
B)  increasing marginal returns to its variable factor(s) of production. 
C)  constant marginal returns to its variable factor(s) of production. 
D)  entry by rival firms whenever profits become positive. 
A)  diminishing marginal returns to its variable factor(s) of production. 
B)  increasing marginal returns to its variable factor(s) of production. 
C)  constant marginal returns to its variable factor(s) of production. 
D)  entry by rival firms whenever profits become positive.

Question 10

Use the following to answer question(s): Monopoly Model
  
-(Exhibit: Monopoly Model) The profit-maximizing quantity is the one indicated by the distance:

Accepted Answer

A)  0W. 
B)  0J. 
C)  0K. 
D)  0L. 
A)  0W. 
B)  0J. 
C)  0K. 
D)  0L.

Question 11

In general, a monopoly is likely to:

Accepted Answer

A)  earn lower profits than a perfectly competitive firm. 
B)  earn about the same profits as a perfectly competitive firm. 
C)  sell more output than if perfectly competitive firms characterized the same industry. 
D)  charge a higher price than if perfectly competitive firms characterized the same industry. 
A)  earn lower profits than a perfectly competitive firm. 
B)  earn about the same profits as a perfectly competitive firm. 
C)  sell more output than if perfectly competitive firms characterized the same industry. 
D)  charge a higher price than if perfectly competitive firms characterized the same industry.

Question 12

The marginal revenue curve for a price setter will always:

Accepted Answer

A)  bisect any horizontal line drawn between the vertical axis and the demand curve. 
B)  bisect any vertical line drawn between the horizontal axis and the demand curve. 
C)  lie above and to the right of the demand curve. 
D)  be less steeply sloped than the demand curve. 
A)  bisect any horizontal line drawn between the vertical axis and the demand curve. 
B)  bisect any vertical line drawn between the horizontal axis and the demand curve. 
C)  lie above and to the right of the demand curve. 
D)  be less steeply sloped than the demand curve.

Question 13

A feature of monopoly that leads to unfavorable consequences is that it:

Accepted Answer

A)  increases income inequality. 
B)  sets marginal cost equal to price. 
C)  produces more output than if perfectly competitive firms characterized the same industry. 
D)  charges a lower price than if perfectly competitive firms characterized the same industry. 
A)  increases income inequality. 
B)  sets marginal cost equal to price. 
C)  produces more output than if perfectly competitive firms characterized the same industry. 
D)  charges a lower price than if perfectly competitive firms characterized the same industry.

Question 14

In monopoly:

Accepted Answer

A)  because P > MC, a basic condition for efficiency is violated. 
B)  consumers are confronted with a price that is lower than marginal cost. 
C)  consumers will consume more of the good than is economically efficient. 
D)  all of the above are true. 
A)  because P > MC, a basic condition for efficiency is violated. 
B)  consumers are confronted with a price that is lower than marginal cost. 
C)  consumers will consume more of the good than is economically efficient. 
D)  all of the above are true.

A monopoly inefficiently allocates resources by producing a smaller quantity at a higher price than if perfectly competitive firms characterized the same industry.

The Case in Point on hockey teams suggested that if a sports team had a large enough stadium, it would maximize its profits by selling that quantity of tickets per game where marginal revenue was:

A profit-maximizing monopoly firm:

Use the following to answer question(s): Computing Monopoly Profit -(Exhibit: Computing Monopoly Profit) When the MR curve crosses the horizontal axis:

The demand curve for a monopoly is:

A restricted-input monopoly is most likely to result if a single firm:

A firm that confronts economies of scale:

Public policies towards monopoly in the United States consists of:

The XYZ Company is a profit-maximizing firm with a monopoly in the production of pennants.The firm sells its pennants for $10 each.We can conclude that the XYZ Company is experiencing:

Use the following to answer question(s): Monopoly Model -(Exhibit: Monopoly Model) The profit-maximizing quantity is the one indicated by the distance:

In general, a monopoly is likely to:

The marginal revenue curve for a price setter will always:

A feature of monopoly that leads to unfavorable consequences is that it:

In monopoly:

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 inefficiently allocates resources by producing a smaller quantity at a higher price than if perfectly competitive firms characterized the same industry.

The Case in Point on hockey teams suggested that if a sports team had a large enough stadium, it would maximize its profits by selling that quantity of tickets per game where marginal revenue was:

A profit-maximizing monopoly firm:

Use the following to answer question(s): Computing Monopoly Profit -(Exhibit: Computing Monopoly Profit) When the MR curve crosses the horizontal axis:

The demand curve for a monopoly is:

A restricted-input monopoly is most likely to result if a single firm:

A firm that confronts economies of scale:

Public policies towards monopoly in the United States consists of:

The XYZ Company is a profit-maximizing firm with a monopoly in the production of pennants.The firm sells its pennants for $10 each.We can conclude that the XYZ Company is experiencing:

Use the following to answer question(s): Monopoly Model -(Exhibit: Monopoly Model) The profit-maximizing quantity is the one indicated by the distance:

In general, a monopoly is likely to:

The marginal revenue curve for a price setter will always:

A feature of monopoly that leads to unfavorable consequences is that it:

In monopoly:

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