Question 1

The only dentist in a small isolated country town is an example of a/an:

Accepted Answer

A)  oligopoly. 
B)  monopolistically competitive firm. 
C)  monopoly. 
D)  competitive firm. 
A)  oligopoly. 
B)  monopolistically competitive firm. 
C)  monopoly. 
D)  competitive firm.

Question 2

Both a perfectly competitive firm and a monopolist:

Accepted Answer

A)  always earn an economic profit. 
B)  maximise profit by setting marginal cost equal to marginal revenue. 
C)  maximise profit by setting marginal cost equal to average total cost. 
D)  are price takers. 
A)  always earn an economic profit. 
B)  maximise profit by setting marginal cost equal to marginal revenue. 
C)  maximise profit by setting marginal cost equal to average total cost. 
D)  are price takers.

Question 3

Narrbegin Exhibit 8.4 Demand and cost curves for a monopolist   
-As shown in Exhibit 8.4, in order to maximise its profit (or minimise its loss), how much output should the monopoly produce?

Accepted Answer

A)  2 units per hour. 
B)  4 units per hour. 
C)  6 units per hour. 
D)  8 units per hour. 
A)  2 units per hour. 
B)  4 units per hour. 
C)  6 units per hour. 
D)  8 units per hour.

Question 4

Monopolies can charge any price they like and sell as much as they want.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true about a monopoly?

Accepted Answer

A)  A monopoly charges a higher price and produces a lower output level than if the market were competitive. 
B)  A monopoly is guaranteed an economic profit. 
C)  A monopoly charges the highest possible price. 
D)  A monopoly will shut down whenever losses are incurred. 
A)  A monopoly charges a higher price and produces a lower output level than if the market were competitive. 
B)  A monopoly is guaranteed an economic profit. 
C)  A monopoly charges the highest possible price. 
D)  A monopoly will shut down whenever losses are incurred.

Question 6

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly
 $$\begin{array} { | c | c | c | } 
\hline \text { Quantity } & \text { Price } & \text { Tatal Cost } \
\hline 0 & 40 & 10 \
\hline 1 & 30 & 15 \
\hline 2 & 20 & 25 \
\hline 3 & 10 & 40 \
\hline 4 & 0 & 60 \
\hline
\end{array}$$ 
-The marginal revenue of the third unit of output in Exhibit 8.2 is:

Accepted Answer

A)  -10. 
B)  10. 
C)  20. 
D)  30. 
A)  -10. 
B)  10. 
C)  20. 
D)  30.

Question 7

The act of buying a commodity in one market at a lower price and selling it in another market at a higher price is known as:

Accepted Answer

A)  buying long. 
B)  selling short. 
C)  a tariff. 
D)  arbitrage. 
A)  buying long. 
B)  selling short. 
C)  a tariff. 
D)  arbitrage.

Question 8

Economists:

Accepted Answer

A)  mostly do not support price discrimination. 
B)  wholeheartedly support price discrimination. 
C)  are indifferent to the topic of price discrimination. 
D)  do not understand why price discrimination occurs. 
E)  are unsure whether to support price discrimination or not. 
A)  mostly do not support price discrimination. 
B)  wholeheartedly support price discrimination. 
C)  are indifferent to the topic of price discrimination. 
D)  do not understand why price discrimination occurs. 
E)  are unsure whether to support price discrimination or not.

Question 9

Another way to say that marginal revenue is less than the price at a given level of output is that:

Accepted Answer

A)  the marginal output curve lies below the demand curve. 
B)  the marginal revenue curve lies above the demand curve. 
C)  the marginal revenue curve is the same as the demand curve. 
D)  the marginal revenue curve lies below the demand curve. 
A)  the marginal output curve lies below the demand curve. 
B)  the marginal revenue curve lies above the demand curve. 
C)  the marginal revenue curve is the same as the demand curve. 
D)  the marginal revenue curve lies below the demand curve.

Question 10

There is only one petrol station within hundreds of miles. The owner finds that when she charges $3 a litre, she sells 99 litres a day, and when she charges $2.95 a litre, she sells 100 litres a day. The marginal revenue of the 100th litre of petrol (in absolute terms) is:

Accepted Answer

A)  $5. 
B)  $2. 
C)  $0. 
D)  $3. 
A)  $5. 
B)  $2. 
C)  $0. 
D)  $3.

Question 11

A monopolist will operate in the short run if which of the following is above average variable cost?

Accepted Answer

A)  Marginal cost. 
B)  Marginal revenue. 
C)  Price. 
D)  Average total cost. 
A)  Marginal cost. 
B)  Marginal revenue. 
C)  Price. 
D)  Average total cost.

Question 12

Predatory pricing can occur in a monopoly market because:

Accepted Answer

A)  the firm has no potential competitors to stop it doing so. 
B)  the firm wishes to create an entry barrier for the potential entrants. 
C)  the government has a tax incentive to let it happen. 
D)  the monopolist is trying to maximise short-term profits. 
A)  the firm has no potential competitors to stop it doing so. 
B)  the firm wishes to create an entry barrier for the potential entrants. 
C)  the government has a tax incentive to let it happen. 
D)  the monopolist is trying to maximise short-term profits.

Question 13

If a firm is able to price-discriminate:

Accepted Answer

A)  some groups of the population will benefit. 
B)  the monopolist earns a lower profit but all consumers gain. 
C)  all consumers are worse off. 
D)  both the monopolist and the consumer are worse off. 
A)  some groups of the population will benefit. 
B)  the monopolist earns a lower profit but all consumers gain. 
C)  all consumers are worse off. 
D)  both the monopolist and the consumer are worse off.

Question 14

If price is less than average variable cost, a monopoly should shut down.

Accepted Answer

A) True 
 B)False

Question 15

Narrbegin Exhibit 8.7   
-According to Exhibit 8.7, if one firm were to buy all of the other firms in the market and become a monopoly, we could expect which of the following to occur?

Accepted Answer

A)  Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B)  Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C)  Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D)  Price to fall from P1 to P0 and output to fall from Q2 to Q1. 
A)  Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B)  Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C)  Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D)  Price to fall from P1 to P0 and output to fall from Q2 to Q1.

Question 16

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve, total revenue is:

Accepted Answer

A)  greater than 1. 
B)  maximum. 
C)  less than 1. 
D)  equal to zero. 
E)  not determinable. 
A)  greater than 1. 
B)  maximum. 
C)  less than 1. 
D)  equal to zero. 
E)  not determinable.

Question 17

For every level of output, marginal revenue is:

Accepted Answer

A)  higher than price. 
B)  less than price. 
C)  equal to price. 
D)  undetermined. 
A)  higher than price. 
B)  less than price. 
C)  equal to price. 
D)  undetermined.

Question 18

Narrbegin Exhibit 8.5 Demand and cost data for a monopolist
 $\begin{array}{|c|c|c|c|c|c|}
\hline \text { Price } & \text { Quantity } & \text { TR } & \text { MR } & \mathrm{TC} & \text { Profi } \
\hline \$ 10 & 1 & 10 & 10 & 4 & \
\hline 9 & 2 & & & 8 & \
\hline 8 & 3 & & & 12 & \
\hline 7 & 4 & & & 16 & \
\hline 6 & 5 & & & 20 & \
\hline 5 & 6 & & & 24 & \
\hline 4 & 7 & & & 28 & \
\hline 3 & 8 & & & 32 & \
\hline 2 & 9 & & & 36 & \
\hline 1 & 10 & & & 40 & \
\hline
\end{array}$ 
-By calculating the data provided in Exhibit 8.5, how much is the profit if the firm decides to produce 7 units?

Accepted Answer

A)  zero. 
B)  6. 
C)  12. 
D)  16. 
A)  zero. 
B)  6. 
C)  12. 
D)  16.

Question 19

Legal barriers protect firms from:

Accepted Answer

A)  losses. 
B)  high prices. 
C)  potential competitors. 
D)  taxes. 
A)  losses. 
B)  high prices. 
C)  potential competitors. 
D)  taxes.

Question 20

Under monopoly, the consumers:

Accepted Answer

A)  can influence the price. 
B)  have a choice of many producers. 
C)  have a choice to buy a product or to do without it. 
D)  have an option to get a variety of products from several suppliers. 
A)  can influence the price. 
B)  have a choice of many producers. 
C)  have a choice to buy a product or to do without it. 
D)  have an option to get a variety of products from several suppliers.

The only dentist in a small isolated country town is an example of a/an:

Both a perfectly competitive firm and a monopolist:

Narrbegin Exhibit 8.4 Demand and cost curves for a monopolist -As shown in Exhibit 8.4, in order to maximise its profit (or minimise its loss), how much output should the monopoly produce?

Monopolies can charge any price they like and sell as much as they want.

Which of the following is true about a monopoly?

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly Quantity Price Tatal Cost 0 40 10 1 30 15 2 20 25 3 10 40 4 0 60 -The marginal revenue of the third unit of output in Exhibit 8.2 is:

The act of buying a commodity in one market at a lower price and selling it in another market at a higher price is known as:

Economists:

Another way to say that marginal revenue is less than the price at a given level of output is that:

There is only one petrol station within hundreds of miles. The owner finds that when she charges $3 a litre, she sells 99 litres a day, and when she charges $2.95 a litre, she sells 100 litres a day. The marginal revenue of the 100th litre of petrol (in absolute terms) is:

A monopolist will operate in the short run if which of the following is above average variable cost?

Predatory pricing can occur in a monopoly market because:

If a firm is able to price-discriminate:

If price is less than average variable cost, a monopoly should shut down.

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if one firm were to buy all of the other firms in the market and become a monopoly, we could expect which of the following to occur?

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve, total revenue is:

For every level of output, marginal revenue is:

Narrbegin Exhibit 8.5 Demand and cost data for a monopolist Price Quantity TR MR Profi \ 10 1 10 10 4 9 2 8 8 3 12 7 4 16 6 5 20 5 6 24 4 7 28 3 8 32 2 9 36 1 10 40 -By calculating the data provided in Exhibit 8.5, how much is the profit if the firm decides to produce 7 units?

Legal barriers protect firms from:

Under monopoly, the consumers:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

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Exam 9: Monopoly

The only dentist in a small isolated country town is an example of a/an:

Both a perfectly competitive firm and a monopolist:

Narrbegin Exhibit 8.4 Demand and cost curves for a monopolist -As shown in Exhibit 8.4, in order to maximise its profit (or minimise its loss), how much output should the monopoly produce?

Monopolies can charge any price they like and sell as much as they want.

Which of the following is true about a monopoly?

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly Quantity Price Tatal Cost 0 40 10 1 30 15 2 20 25 3 10 40 4 0 60 -The marginal revenue of the third unit of output in Exhibit 8.2 is:

The act of buying a commodity in one market at a lower price and selling it in another market at a higher price is known as:

Economists:

Another way to say that marginal revenue is less than the price at a given level of output is that:

There is only one petrol station within hundreds of miles. The owner finds that when she charges $3 a litre, she sells 99 litres a day, and when she charges $2.95 a litre, she sells 100 litres a day. The marginal revenue of the 100th litre of petrol (in absolute terms) is:

A monopolist will operate in the short run if which of the following is above average variable cost?

Predatory pricing can occur in a monopoly market because:

If a firm is able to price-discriminate:

If price is less than average variable cost, a monopoly should shut down.

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if one firm were to buy all of the other firms in the market and become a monopoly, we could expect which of the following to occur?

At the point where the marginal revenue equals zero for a monopolist facing a downward-sloping straight-line demand curve, total revenue is:

For every level of output, marginal revenue is:

Narrbegin Exhibit 8.5 Demand and cost data for a monopolist Price Quantity TR MR Profi \ 10 1 10 10 4 9 2 8 8 3 12 7 4 16 6 5 20 5 6 24 4 7 28 3 8 32 2 9 36 1 10 40 -By calculating the data provided in Exhibit 8.5, how much is the profit if the firm decides to produce 7 units?

Legal barriers protect firms from:

Under monopoly, the consumers:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters