Question 1

The monopolization of a previously competitive industry will lead to restricted production and higher prices.

Accepted Answer

A) True 
 B)False  True

Question 2

Concentration ratios are used to measure the

Accepted Answer

A) Potential monopoly power within an industry 
B) Strength of the demand for an industry's product 
C) Potential monopoly power of a firm 
D) Degree of competition between firms in different markets 
E) Level of perfection in a competitive market 
A) Potential monopoly power within an industry 
B) Strength of the demand for an industry's product 
C) Potential monopoly power of a firm 
D) Degree of competition between firms in different markets 
E) Level of perfection in a competitive market A

Question 3

Monopoly firms typically have lower costs than competitive firms because they receive bulk-buying discounts for their inputs.

Accepted Answer

A) True 
 B)False  False

Question 4

The Following Questions Refer to the following graph.For each question,disregard any irrelevant lines.  
-Now suppose the same market is monopolizeD.Equilibrium market price and output would be

Accepted Answer

A) P3,X1 
B) P3,X2 
C) P2,X3 
D) P1,X2 
E) P1,X4 
A) P3,X1 
B) P3,X2 
C) P2,X3 
D) P1,X2 
E) P1,X4

Question 5

Some would argue that one of the primary benefits of possessing a monopoly is

Accepted Answer

A) The chance to erect entry barriers 
B) The opportunity to live the quiet life 
C) The ability to restrict output 
D) The chance to create deadweight losses 
E) The ability to jack up prices to consumers 
A) The chance to erect entry barriers 
B) The opportunity to live the quiet life 
C) The ability to restrict output 
D) The chance to create deadweight losses 
E) The ability to jack up prices to consumers

Question 6

The government's regulation of pollution

Accepted Answer

A) Is justified because of natural monopoly 
B) Is justified by poorly defined property rights 
C) Is justified by concentration ratios 
D) Is not likely to improve on the market outcome 
E) Cannot be defended on economic grounds 
A) Is justified because of natural monopoly 
B) Is justified by poorly defined property rights 
C) Is justified by concentration ratios 
D) Is not likely to improve on the market outcome 
E) Cannot be defended on economic grounds

Question 7

Ford Motors more closely resembles a monopoly than does your local electric company.

Accepted Answer

A) True 
 B)False

Question 8

The Following Questions Refer to the table below.  
-Assume that no firm in this industry accounts for less than 5% of industry sales.What is the largest number of firms that could be in this industry?

Accepted Answer

A) 6 
B) 7 
C) 8 
D) 9 
E) 10 
A) 6 
B) 7 
C) 8 
D) 9 
E) 10

Question 9

Which of the following is an example of nonprice competition?

Accepted Answer

A) Advertising 
B) Changing the design of a product 
C) Incorporating new technology in a product 
D) Improving the quality of a product 
E) All of the above 
A) Advertising 
B) Changing the design of a product 
C) Incorporating new technology in a product 
D) Improving the quality of a product 
E) All of the above

Question 10

The Following Questions Refer to the graph below,showing a monopoly market.  
-For the firm shown on the graph,profit maximization occurs at what price and quantity?

Accepted Answer

A) $20 and 50 
B) $15 and 70 
C) $15 and 50 
D) $10 and 50 
E) $10 and 70 
A) $20 and 50 
B) $15 and 70 
C) $15 and 50 
D) $10 and 50 
E) $10 and 70

Question 11

The supply curve for a monopoly

Accepted Answer

A) Is its marginal revenue curve 
B) Is its total revenue curve 
C) Is its marginal cost curve 
D) Is its total cost curve 
E) Does not exist 
A) Is its marginal revenue curve 
B) Is its total revenue curve 
C) Is its marginal cost curve 
D) Is its total cost curve 
E) Does not exist

Question 12

When the value of a product to a consumer is enhanced when others also consume the good,economies of scale exist.

Accepted Answer

A) True 
 B)False

Question 13

Shortages are important evidence that firms are exercising monopoly power.

Accepted Answer

A) True 
 B)False

Question 14

Monopoly power in the U.S.does not pose a significant economic problem.

Accepted Answer

A) True 
 B)False

Question 15

The dead-weight welfare loss due to monopoly

Accepted Answer

A) Results from the monopolist's tendency to reduce output below the competitive level 
B) Is a measure of the cost to society from the monopolistic misallocation of resources 
C) Is estimated to be about 1% of GDP per year 
D) Is a loss to consumers not offset by anyone else's gain 
E) All of the above 
A) Results from the monopolist's tendency to reduce output below the competitive level 
B) Is a measure of the cost to society from the monopolistic misallocation of resources 
C) Is estimated to be about 1% of GDP per year 
D) Is a loss to consumers not offset by anyone else's gain 
E) All of the above

Question 16

Monopolies in the U.S.economy are estimated to reduce GDP by about 1% per year.

Accepted Answer

A) True 
 B)False

Question 17

The Following Questions Refer to the graph below,showing a monopoly market.  
-Monopolization of this market leads to a deadweight loss equal to

Accepted Answer

A) $0 
B) $50 
C) $100 
D) $150 
E) Cannot be determined 
A) $0 
B) $50 
C) $100 
D) $150 
E) Cannot be determined

Question 18

Which of the following provides the strongest economic justification for regulation?

Accepted Answer

A) Natural monopoly 
B) Excess consumer information 
C) Shortages and high prices 
D) All of the above 
E) None of the above 
A) Natural monopoly 
B) Excess consumer information 
C) Shortages and high prices 
D) All of the above 
E) None of the above

Question 19

Corporations

Accepted Answer

A) Are legal entities separate from their owners 
B) Are owned by stockholders 
C) Finance their operations through many small investors 
D) Account for 20% of all businesses in the United States 
E) All of the above 
A) Are legal entities separate from their owners 
B) Are owned by stockholders 
C) Finance their operations through many small investors 
D) Account for 20% of all businesses in the United States 
E) All of the above

Question 20

The best estimate of the dead-weight welfare loss due to monopoly is biased downward because it does not take into account

Accepted Answer

A) Reductions in product quality 
B) Higher costs of production 
C) Decreases in product variety 
D) All of the above 
E) None of the above 
A) Reductions in product quality 
B) Higher costs of production 
C) Decreases in product variety 
D) All of the above 
E) None of the above

The monopolization of a previously competitive industry will lead to restricted production and higher prices.

Concentration ratios are used to measure the

Monopoly firms typically have lower costs than competitive firms because they receive bulk-buying discounts for their inputs.

The Following Questions Refer to the following graph.For each question,disregard any irrelevant lines. -Now suppose the same market is monopolizeD.Equilibrium market price and output would be

Some would argue that one of the primary benefits of possessing a monopoly is

The government's regulation of pollution

Ford Motors more closely resembles a monopoly than does your local electric company.

The Following Questions Refer to the table below. -Assume that no firm in this industry accounts for less than 5% of industry sales.What is the largest number of firms that could be in this industry?

Which of the following is an example of nonprice competition?

The Following Questions Refer to the graph below,showing a monopoly market. -For the firm shown on the graph,profit maximization occurs at what price and quantity?

The supply curve for a monopoly

When the value of a product to a consumer is enhanced when others also consume the good,economies of scale exist.

Shortages are important evidence that firms are exercising monopoly power.

Monopoly power in the U.S.does not pose a significant economic problem.

The dead-weight welfare loss due to monopoly

Monopolies in the U.S.economy are estimated to reduce GDP by about 1% per year.

The Following Questions Refer to the graph below,showing a monopoly market. -Monopolization of this market leads to a deadweight loss equal to

Which of the following provides the strongest economic justification for regulation?

Corporations

The best estimate of the dead-weight welfare loss due to monopoly is biased downward because it does not take into account

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Pollution Problems: Must We Foul Our Own Nests

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters

Exam 8: The Economics of Monopoly Power: Can Markets Be Controlled

The monopolization of a previously competitive industry will lead to restricted production and higher prices.

Concentration ratios are used to measure the

Monopoly firms typically have lower costs than competitive firms because they receive bulk-buying discounts for their inputs.

The Following Questions Refer to the following graph.For each question,disregard any irrelevant lines. -Now suppose the same market is monopolizeD.Equilibrium market price and output would be

Some would argue that one of the primary benefits of possessing a monopoly is

The government's regulation of pollution

Ford Motors more closely resembles a monopoly than does your local electric company.

The Following Questions Refer to the table below. -Assume that no firm in this industry accounts for less than 5% of industry sales.What is the largest number of firms that could be in this industry?

Which of the following is an example of nonprice competition?

The Following Questions Refer to the graph below,showing a monopoly market. -For the firm shown on the graph,profit maximization occurs at what price and quantity?

The supply curve for a monopoly

When the value of a product to a consumer is enhanced when others also consume the good,economies of scale exist.

Shortages are important evidence that firms are exercising monopoly power.

Monopoly power in the U.S.does not pose a significant economic problem.

The dead-weight welfare loss due to monopoly

Monopolies in the U.S.economy are estimated to reduce GDP by about 1% per year.

The Following Questions Refer to the graph below,showing a monopoly market. -Monopolization of this market leads to a deadweight loss equal to

Which of the following provides the strongest economic justification for regulation?

Corporations

The best estimate of the dead-weight welfare loss due to monopoly is biased downward because it does not take into account

Alleviating Human Misery: The Role of Economic Reasoning

Economic Systems, Resource Allocation, and Social Well-Being: Lessons From Chinas Transition

Government Control of Prices in Mixed Systems: Who Are the Winners and Losers

Pollution Problems: Must We Foul Our Own Nests

Economics of Crime and Its Prevention: How Much Is Too Much

The Economics of Education: Crisis and Reform

Poverty Problems and Discrimination: Why Are so Many Still so Poor

The Economics of Professional Sports: What Is the Real Score

Competition in the Global Market-Place: Should We Protect Ourselves From International Trade

Economic Growth: Why Is the Economic Road so Bumpy

Money,Banking and the Financial System: Old Problems With New Twists

Unemployment and Inflation: Can We Find a Balance

Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Social Security and Medicare: How Secure Is Our Safety Net for the Elderly

Filters