Question 1

Monopoly markets cannot be contestable since there is only one firm.

Accepted Answer

A) True 
 B)False

Question 2

Figure 7.2:  
-In Figure 7.2,profit per unit for a profit-maximizing monopolist is closest to:

Accepted Answer

A)  $1.00. 
B)  $3.50. 
C)  $7.50. 
D)  $8.00 
A)  $1.00. 
B)  $3.50. 
C)  $7.50. 
D)  $8.00

Question 3

A natural monopoly is a firm that:

Accepted Answer

A)  Produces a large volume of output and drives out most of its competitors. 
B)  Can produce the entire market supply more efficiently than any number of smaller firms. 
C)  Has government assistance in erecting high barriers to entry. 
D)  Guarantees the lowest price for consumers. 
A)  Produces a large volume of output and drives out most of its competitors. 
B)  Can produce the entire market supply more efficiently than any number of smaller firms. 
C)  Has government assistance in erecting high barriers to entry. 
D)  Guarantees the lowest price for consumers.

Question 4

Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each.In order to increase sales by one item per month,the monopolist must lower the price of its medical device by $100 to $1,900.The marginal revenue of the 16th item is:

Accepted Answer

A)  $100. 
B)  $400. 
C)  $1,900. 
D)  $2,000. 
A)  $100. 
B)  $400. 
C)  $1,900. 
D)  $2,000.

Question 5

Use the following demand schedule for a monopolist to calculate total revenue,marginal revenue and the price elasticity of demand between each price level.Using the information from the schedule graph the demand curve,marginal revenue curve and the total revenue and identify the portion of the demand curve that is elastic,and inelastic.

Accepted Answer

@#IMG-DLM&_TB5714_00

Question 6

A patent:

Accepted Answer

A)  Is a government grant of exclusive ownership of an innovation. 
B)  Requires a firm to share its innovations with others. 
C)  Protects a perfectly competitive firm from competition. 
D)  Is an illegal method to protect an innovative idea. 
A)  Is a government grant of exclusive ownership of an innovation. 
B)  Requires a firm to share its innovations with others. 
C)  Protects a perfectly competitive firm from competition. 
D)  Is an illegal method to protect an innovative idea.

Question 7

Which market structure is characterized by a few interdependent firms?

Accepted Answer

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

Question 8

Although there are other pizza restaurants in town,Pecos' Pizza Place is the oldest and largest so it is a monopoly.

Accepted Answer

A) True 
 B)False

Question 9

A market made up of many firms,each of which has some distinct brand image,is called:

Accepted Answer

A)  A price-setting market. 
B)  A monopolistically competitive market. 
C)  A perfectly competitive market. 
D)  An oligopoly. 
A)  A price-setting market. 
B)  A monopolistically competitive market. 
C)  A perfectly competitive market. 
D)  An oligopoly.

Question 10

Economies of scale occur when the long-run average cost curve slopes downward.

Accepted Answer

A) True 
 B)False

Question 11

Figure 7.1:   
-In Figure 7.1,at the profit maximizing level of output for a monopolist,marginal cost is:

Accepted Answer

A)  $5.00. 
B)  $7.00. 
C)  $9.00. 
D)  Between $6.00 and $7.00. 
A)  $5.00. 
B)  $7.00. 
C)  $9.00. 
D)  Between $6.00 and $7.00.

Question 12

The marginal revenue curve for a monopolist is greater than the price because the monopolist faces a downward sloping demand curve for its product.

Accepted Answer

A) True 
 B)False

Question 13

Suppose two firms dominate a market and control price and output.This type of market is called:

Accepted Answer

A)  A duopoly. 
B)  A monopoly. 
C)  Monopolistically competitive. 
D)  An oligopoly. 
A)  A duopoly. 
B)  A monopoly. 
C)  Monopolistically competitive. 
D)  An oligopoly.

Question 14

Figure 7.1:   
-In Figure 7.1,the price charged by a profit-maximizing monopolist is:

Accepted Answer

A)  $5.00. 
B)  $7.00. 
C)  $9.00. 
D)  Between $6.00 and $7.00. 
A)  $5.00. 
B)  $7.00. 
C)  $9.00. 
D)  Between $6.00 and $7.00.

Question 15

Figure 7.2:  
-In Figure 7.2,if this industry is competitive,the profit-maximizing level of output is:

Accepted Answer

A)  3 units. 
B)  4 units. 
C)  Between 3 and 4 units. 
D)  Between 4 and 5 units. 
A)  3 units. 
B)  4 units. 
C)  Between 3 and 4 units. 
D)  Between 4 and 5 units.

Question 16

Figure 7.3:  
-In Figure 7.3,profit per unit for a profit-maximizing monopolist is:

Accepted Answer

A)  $3. 
B)  $6. 
C)  $7. 
D)  $9. 
A)  $3. 
B)  $6. 
C)  $7. 
D)  $9.

Question 17

If a market changes from perfectly competitive to monopolistic,output will increase and the price will decrease,ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an effective barrier to entry?

Accepted Answer

A)  Low capital requirements. 
B)  Exclusive licensing. 
C)  Patent Protection. 
D)  Threat of entry. 
A)  Low capital requirements. 
B)  Exclusive licensing. 
C)  Patent Protection. 
D)  Threat of entry.

Question 19

If you want to fly to Los Angeles,a place most airlines fly in and out of,the airline industry is likely _____,but if you want to fly to a small town in Texas,where only one airline flies,the airline industry is likely _____.

Accepted Answer

A)  Competitive;duopolistic 
B)  Competitive;monopolistic 
C)  Monopolistic;competitive 
D)  Monopolistic;oligopolistic 
A)  Competitive;duopolistic 
B)  Competitive;monopolistic 
C)  Monopolistic;competitive 
D)  Monopolistic;oligopolistic

Question 20

Consumers may not experience the benefits of economies of scale if a natural monopoly:

Accepted Answer

A)  Raises price and fails to pass cost savings on to consumers. 
B)  Engages in marginal cost pricing. 
C)  Raises output beyond efficient levels. 
D)  Is regulated by the government. 
A)  Raises price and fails to pass cost savings on to consumers. 
B)  Engages in marginal cost pricing. 
C)  Raises output beyond efficient levels. 
D)  Is regulated by the government.

Monopoly markets cannot be contestable since there is only one firm.

Figure 7.2: -In Figure 7.2,profit per unit for a profit-maximizing monopolist is closest to:

A natural monopoly is a firm that:

Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each.In order to increase sales by one item per month,the monopolist must lower the price of its medical device by $100 to $1,900.The marginal revenue of the 16^th item is:

A patent:

Which market structure is characterized by a few interdependent firms?

Although there are other pizza restaurants in town,Pecos' Pizza Place is the oldest and largest so it is a monopoly.

A market made up of many firms,each of which has some distinct brand image,is called:

Economies of scale occur when the long-run average cost curve slopes downward.

Figure 7.1: -In Figure 7.1,at the profit maximizing level of output for a monopolist,marginal cost is:

The marginal revenue curve for a monopolist is greater than the price because the monopolist faces a downward sloping demand curve for its product.

Suppose two firms dominate a market and control price and output.This type of market is called:

Figure 7.1: -In Figure 7.1,the price charged by a profit-maximizing monopolist is:

Figure 7.2: -In Figure 7.2,if this industry is competitive,the profit-maximizing level of output is:

Figure 7.3: -In Figure 7.3,profit per unit for a profit-maximizing monopolist is:

If a market changes from perfectly competitive to monopolistic,output will increase and the price will decrease,ceteris paribus.

Which of the following is not an effective barrier to entry?

If you want to fly to Los Angeles,a place most airlines fly in and out of,the airline industry is likely _,but if you want to fly to a small town in Texas,where only one airline flies,the airline industry is likely _.

Consumers may not experience the benefits of economies of scale if a natural monopoly:

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 markets cannot be contestable since there is only one firm.

Figure 7.2: -In Figure 7.2,profit per unit for a profit-maximizing monopolist is closest to:

A natural monopoly is a firm that:

Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each.In order to increase sales by one item per month,the monopolist must lower the price of its medical device by $100 to $1,900.The marginal revenue of the 16th item is:

A patent:

Which market structure is characterized by a few interdependent firms?

Although there are other pizza restaurants in town,Pecos' Pizza Place is the oldest and largest so it is a monopoly.

A market made up of many firms,each of which has some distinct brand image,is called:

Economies of scale occur when the long-run average cost curve slopes downward.

Figure 7.1: -In Figure 7.1,at the profit maximizing level of output for a monopolist,marginal cost is:

The marginal revenue curve for a monopolist is greater than the price because the monopolist faces a downward sloping demand curve for its product.

Suppose two firms dominate a market and control price and output.This type of market is called:

Figure 7.1: -In Figure 7.1,the price charged by a profit-maximizing monopolist is:

Figure 7.2: -In Figure 7.2,if this industry is competitive,the profit-maximizing level of output is:

Figure 7.3: -In Figure 7.3,profit per unit for a profit-maximizing monopolist is:

If a market changes from perfectly competitive to monopolistic,output will increase and the price will decrease,ceteris paribus.

Which of the following is not an effective barrier to entry?

If you want to fly to Los Angeles,a place most airlines fly in and out of,the airline industry is likely _____,but if you want to fly to a small town in Texas,where only one airline flies,the airline industry is likely _____.

Consumers may not experience the benefits of economies of scale if a natural monopoly:

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

Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each.In order to increase sales by one item per month,the monopolist must lower the price of its medical device by $100 to $1,900.The marginal revenue of the 16^th item is:

If you want to fly to Los Angeles,a place most airlines fly in and out of,the airline industry is likely _,but if you want to fly to a small town in Texas,where only one airline flies,the airline industry is likely _.