Question 1

Monopoly profits are an example of a barrier to entry in monopoly markets.

Accepted Answer

A) True 
 B)False  False

Question 2

Obstacles that make it difficult or impossible for would-be producers to enter a market are known as:

Accepted Answer

A)  Barriers to entry. 
B)  Monopoly profits. 
C)  Entry blockades. 
D)  Entry tariffs. 
A)  Barriers to entry. 
B)  Monopoly profits. 
C)  Entry blockades. 
D)  Entry tariffs. A

Question 3

Which of the following is not true for a monopoly?

Accepted Answer

A)  The demand curve for the monopoly and the market are the same. 
B)  It has no direct competitors. 
C)  It can use its market power to charge higher prices than a competitive firm. 
D)  It is a price taker. 
A)  The demand curve for the monopoly and the market are the same. 
B)  It has no direct competitors. 
C)  It can use its market power to charge higher prices than a competitive firm. 
D)  It is a price taker. D

Question 4

Which of the following do a monopolist and a competitive firm have in common?

Accepted Answer

A)  Predatory pricing. 
B)  Barriers to entry. 
C)  Marginal cost pricing. 
D)  Profit-maximization rule. 
A)  Predatory pricing. 
B)  Barriers to entry. 
C)  Marginal cost pricing. 
D)  Profit-maximization rule.

Question 5

When there are economies of scale,a firm can simply increase capital and unit costs will decline.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a barrier to entry into a monopoly market?

Accepted Answer

A)  A patent. 
B)  Economic profits. 
C)  Exclusive licensing. 
D)  A government franchise. 
A)  A patent. 
B)  Economic profits. 
C)  Exclusive licensing. 
D)  A government franchise.

Question 7

Total profit can be calculated as:

Accepted Answer

A)  Average total cost multiplied by price. 
B)  Total revenue divided by the quantity sold. 
C)  The difference between price and average total cost multiplied by the quantity sold. 
D)  Price and average total cost added together and then multiplied by the quantity sold. 
A)  Average total cost multiplied by price. 
B)  Total revenue divided by the quantity sold. 
C)  The difference between price and average total cost multiplied by the quantity sold. 
D)  Price and average total cost added together and then multiplied by the quantity sold.

Question 8

As noted in the text,which of the following was used by Nintendo to control the video game market?

Accepted Answer

A)  A natural monopoly. 
B)  Economies of scale. 
C)  A government franchise. 
D)  Exclusive licensing. 
A)  A natural monopoly. 
B)  Economies of scale. 
C)  A government franchise. 
D)  Exclusive licensing.

Question 9

Table 7.2-Monopoly costs and revenue  
-In Table 7.2,using the profit-maximization rule,a monopolist will charge a price of:

Accepted Answer

A)  $90. 
B)  $80. 
C)  $70. 
D)  $60. 
A)  $90. 
B)  $80. 
C)  $70. 
D)  $60.

Question 10

An oligopolist may decide to coordinate with others in the industry in order to maximize profits.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true for a monopolist?

Accepted Answer

A)  It is a price taker. 
B)  Profit is maximized where marginal cost equals marginal revenue. 
C)  The firm faces a horizontal or flat demand curve. 
D)  It will earn zero economic profit in the long run. 
A)  It is a price taker. 
B)  Profit is maximized where marginal cost equals marginal revenue. 
C)  The firm faces a horizontal or flat demand curve. 
D)  It will earn zero economic profit in the long run.

Question 12

Suppose a market has many firms and each firm has some brand image.This type of market is called:

Accepted Answer

A)  Duopoly. 
B)  Monopoly. 
C)  Monopolistic competition. 
D)  Oligopoly. 
A)  Duopoly. 
B)  Monopoly. 
C)  Monopolistic competition. 
D)  Oligopoly.

Question 13

Under both monopoly and perfect competition,a firm

Accepted Answer

A)  a price taker. 
B)  a price maker. 
C)  operates where marginal revenue equal marginal cost. 
D)  will in the long-run earn economic profits. 
A)  a price taker. 
B)  a price maker. 
C)  operates where marginal revenue equal marginal cost. 
D)  will in the long-run earn economic profits.

Question 14

The total quantities of a good that people are willing and able to buy at alternative prices defines:

Accepted Answer

A)  Market equilibrium. 
B)  Marginal revenue. 
C)  Market supply. 
D)  Market demand. 
A)  Market equilibrium. 
B)  Marginal revenue. 
C)  Market supply. 
D)  Market demand.

Question 15

In order to sell additional output,a monopolist must lower its price.

Accepted Answer

A) True 
 B)False

Question 16

An industry in which one firm can achieve economies of scale over the entire range of output is referred to as:

Accepted Answer

A)  A natural monopoly. 
B)  Perfectly competitive. 
C)  A neutral monopoly. 
D)  A contestable market. 
A)  A natural monopoly. 
B)  Perfectly competitive. 
C)  A neutral monopoly. 
D)  A contestable market.

Question 17

A monopolist sets price at a point on the _______ curve,corresponding to the rate of output determined by the intersection of _______.

Accepted Answer

A)  Demand;marginal revenue and marginal cost 
B)  Marginal revenue;marginal revenue and marginal cost 
C)  Average total cost;price and marginal cost 
D)  Demand;average total cost and marginal cost 
A)  Demand;marginal revenue and marginal cost 
B)  Marginal revenue;marginal revenue and marginal cost 
C)  Average total cost;price and marginal cost 
D)  Demand;average total cost and marginal cost

Question 18

Which of the following is an argument in support of monopolies?

Accepted Answer

A)  They increase output and raise prices,contributing to greater consumption of scarce resources. 
B)  They are protected from competition so they have greater ability to pursue research and development. 
C)  They contribute to efficient production when there are diseconomies of scale. 
D)  They provide the economic profit necessary for survival and efficient production in a market. 
A)  They increase output and raise prices,contributing to greater consumption of scarce resources. 
B)  They are protected from competition so they have greater ability to pursue research and development. 
C)  They contribute to efficient production when there are diseconomies of scale. 
D)  They provide the economic profit necessary for survival and efficient production in a market.

Question 19

A monopolist achieves the most profitable rate of output by applying which of the following rules?

Accepted Answer

A)  Average variable cost equals price. 
B)  Average total cost equals price. 
C)  Marginal revenue equals marginal cost. 
D)  Average total cost and average variable cost are both at a minimum. 
A)  Average variable cost equals price. 
B)  Average total cost equals price. 
C)  Marginal revenue equals marginal cost. 
D)  Average total cost and average variable cost are both at a minimum.

Question 20

Table 7.2-Monopoly costs and revenue  
-In Table 7.2,at the profit-maximizing rate of output,marginal cost is:

Accepted Answer

A)  $50. 
B)  $60. 
C)  $70. 
D)  $80. 
A)  $50. 
B)  $60. 
C)  $70. 
D)  $80.

Monopoly profits are an example of a barrier to entry in monopoly markets.

Obstacles that make it difficult or impossible for would-be producers to enter a market are known as:

Which of the following is not true for a monopoly?

Which of the following do a monopolist and a competitive firm have in common?

When there are economies of scale,a firm can simply increase capital and unit costs will decline.

Which of the following is not a barrier to entry into a monopoly market?

Total profit can be calculated as:

As noted in the text,which of the following was used by Nintendo to control the video game market?

Table 7.2-Monopoly costs and revenue -In Table 7.2,using the profit-maximization rule,a monopolist will charge a price of:

An oligopolist may decide to coordinate with others in the industry in order to maximize profits.

Which of the following is true for a monopolist?

Suppose a market has many firms and each firm has some brand image.This type of market is called:

Under both monopoly and perfect competition,a firm

The total quantities of a good that people are willing and able to buy at alternative prices defines:

In order to sell additional output,a monopolist must lower its price.

An industry in which one firm can achieve economies of scale over the entire range of output is referred to as:

A monopolist sets price at a point on the _ curve,corresponding to the rate of output determined by the intersection of _.

Which of the following is an argument in support of monopolies?

A monopolist achieves the most profitable rate of output by applying which of the following rules?

Table 7.2-Monopoly costs and revenue -In Table 7.2,at the profit-maximizing rate of output,marginal cost is:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 7: Monopoly

Monopoly profits are an example of a barrier to entry in monopoly markets.

Obstacles that make it difficult or impossible for would-be producers to enter a market are known as:

Which of the following is not true for a monopoly?

Which of the following do a monopolist and a competitive firm have in common?

When there are economies of scale,a firm can simply increase capital and unit costs will decline.

Which of the following is not a barrier to entry into a monopoly market?

Total profit can be calculated as:

As noted in the text,which of the following was used by Nintendo to control the video game market?

Table 7.2-Monopoly costs and revenue -In Table 7.2,using the profit-maximization rule,a monopolist will charge a price of:

An oligopolist may decide to coordinate with others in the industry in order to maximize profits.

Which of the following is true for a monopolist?

Suppose a market has many firms and each firm has some brand image.This type of market is called:

Under both monopoly and perfect competition,a firm

The total quantities of a good that people are willing and able to buy at alternative prices defines:

In order to sell additional output,a monopolist must lower its price.

An industry in which one firm can achieve economies of scale over the entire range of output is referred to as:

A monopolist sets price at a point on the _______ curve,corresponding to the rate of output determined by the intersection of _______.

Which of the following is an argument in support of monopolies?

A monopolist achieves the most profitable rate of output by applying which of the following rules?

Table 7.2-Monopoly costs and revenue -In Table 7.2,at the profit-maximizing rate of output,marginal cost is:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

A monopolist sets price at a point on the _ curve,corresponding to the rate of output determined by the intersection of _.