Question 1

Bus services often offer lower prices for students and pensioners because:

Accepted Answer

A)  they have a more inelastic demand for bus services. 
B)  its the right thing to do morally. 
C)  they have a higher elasticity for bus services than the adult working population. 
D)  they have a higher willingness to pay. 
A)  they have a more inelastic demand for bus services. 
B)  its the right thing to do morally. 
C)  they have a higher elasticity for bus services than the adult working population. 
D)  they have a higher willingness to pay.

Question 2

In contrast to a perfectly competitive firm, a monopolist operates in the long run at a quantity of output at which:

Accepted Answer

A)  P = MC. 
B)  MR = MC. 
C)  P = ATC. 
D)  P > MR. 
A)  P = MC. 
B)  MR = MC. 
C)  P = ATC. 
D)  P > MR.

Question 3

For a monopolist to practise price discrimination, one necessary condition is that the product offered for sale must be:

Accepted Answer

A)  high quality. 
B)  expensive. 
C)  cheap. 
D)  impossible or difficult to resell. 
A)  high quality. 
B)  expensive. 
C)  cheap. 
D)  impossible or difficult to resell.

Question 4

Which barrier to entry results in the creation of a natural monopoly?

Accepted Answer

A)  Legal barriers like government franchises. 
B)  Economies of scale. 
C)  Ownership of a vital resource. 
D)  Patents and copyrights. 
A)  Legal barriers like government franchises. 
B)  Economies of scale. 
C)  Ownership of a vital resource. 
D)  Patents and copyrights.

Question 5

Competition means:

Accepted Answer

A)  that a society's wealth is maximised. 
B)  that a society experiences a deadweight loss. 
C)  high prices and less goods. 
D)  that a society misallocates its resources. 
A)  that a society's wealth is maximised. 
B)  that a society experiences a deadweight loss. 
C)  high prices and less goods. 
D)  that a society misallocates its resources.

Question 6

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

Accepted Answer

A)  Increase output until MC = MR. 
B)  Decrease output until MC = MR. 
C)  Shut down in the long run. 
D)  Keep producing at this level. 
A)  Increase output until MC = MR. 
B)  Decrease output until MC = MR. 
C)  Shut down in the long run. 
D)  Keep producing at this level.

Question 7

A recent study has concluded that working adults have a price elasticity of demand of 1.72 for train services, while pensioners have a price elasticity of demand of 3.74. If price discrimination is possible, then the company providing the train service will:

Accepted Answer

A)  charge a lower price to working adults than to pensioners. 
B)  charge a lower price to pensioners than to working adults. 
C)  earn higher profits by charging everyone the same price. 
D)  lower prices for all customers because demand is elastic for both groups. 
A)  charge a lower price to working adults than to pensioners. 
B)  charge a lower price to pensioners than to working adults. 
C)  earn higher profits by charging everyone the same price. 
D)  lower prices for all customers because demand is elastic for both groups.

Question 8

A casino is often protected by license because:

Accepted Answer

A)  it is helping gamblers to access the services. 
B)  it allows the casino to enjoy the competitive pricing. 
C)  it creates a stream of revenue to the government. 
D)  it invites more casinos to open. 
A)  it is helping gamblers to access the services. 
B)  it allows the casino to enjoy the competitive pricing. 
C)  it creates a stream of revenue to the government. 
D)  it invites more casinos to open.

Question 9

Narrbegin Exhibit 8.6 Monopolist   
-According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $10, what would you advise Rudd to do?

Accepted Answer

A)  Stay where he is currently operating because he is charging the profit-maximising price. 
B)  Increase price and increase output. 
C)  Decrease price and increase output. 
D)  Increase output and hold price constant. 
A)  Stay where he is currently operating because he is charging the profit-maximising price. 
B)  Increase price and increase output. 
C)  Decrease price and increase output. 
D)  Increase output and hold price constant.

Question 10

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves. If the price is between its average variable cost and average total cost curves, the firm will:

Accepted Answer

A)  earn an economic profit. 
B)  stay in operation in the short run, but shut down in the long run if demand remains the same. 
C)  shut down. 
D)  charge a higher price. 
A)  earn an economic profit. 
B)  stay in operation in the short run, but shut down in the long run if demand remains the same. 
C)  shut down. 
D)  charge a higher price.

Question 11

Narrbegin Exhibit 8.6 Monopolist   
-According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $8, what would you advise Rudd to do?

Accepted Answer

A)  Stay where he is currently operating because he is charging the profit-maximising price. 
B)  Increase price and increase output. 
C)  Decrease price and increase output. 
D)  Increase output and hold price constant. 
A)  Stay where he is currently operating because he is charging the profit-maximising price. 
B)  Increase price and increase output. 
C)  Decrease price and increase output. 
D)  Increase output and hold price constant.

Question 12

At a price of $5, 24 units of a good would be sold. At a price of $10, 25 units of output would be sold. The marginal revenue of the 25th unit of output is:

Accepted Answer

A)  $14. 
B)  $55. 
C)  $100. 
D)  $130. 
A)  $14. 
B)  $55. 
C)  $100. 
D)  $130.

Question 13

Narrbegin Exhibit 8.3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine   
-In Exhibit 8.3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

Accepted Answer

A)  $1500. 
B)  $3000. 
C)  $4500. 
D)  $10 500. 
A)  $1500. 
B)  $3000. 
C)  $4500. 
D)  $10 500.

Question 14

The only hairdresser in a small town is an example of:

Accepted Answer

A)  monopsy. 
B)  luxury. 
C)  monopoly. 
D)  oligopoly. 
A)  monopsy. 
B)  luxury. 
C)  monopoly. 
D)  oligopoly.

Question 15

Which of the following statements is true?

Accepted Answer

A)  One reason a monopoly can earn economic profits is because it can raise price and restrict output. 
B)  A perfectly competitive firm can earn economic profits because it can raise price and restrict output. 
C)  Income is transferred from producers to consumers in a monopoly compared to perfect competition. 
D)  Monopolists who price-discriminate rarely earn positive economic profits in the long run. 
A)  One reason a monopoly can earn economic profits is because it can raise price and restrict output. 
B)  A perfectly competitive firm can earn economic profits because it can raise price and restrict output. 
C)  Income is transferred from producers to consumers in a monopoly compared to perfect competition. 
D)  Monopolists who price-discriminate rarely earn positive economic profits in the long run.

Question 16

The monopolist can choose:

Accepted Answer

A)  any price for its product. 
B)  the demand curve. 
C)  price and quantity to produce. 
D)  price or quantity to produce. 
A)  any price for its product. 
B)  the demand curve. 
C)  price and quantity to produce. 
D)  price or quantity to produce.

Question 17

Narrbegin Exhibit 8.7   
-According to Exhibit 8.7, the price a monopolist would charge is:

Accepted Answer

A)  P0. 
B)  P1. 
C)  P2. 
D)  indeterminate as there is not enough information provided. 
A)  P0. 
B)  P1. 
C)  P2. 
D)  indeterminate as there is not enough information provided.

Question 18

A single priced monopoly:

Accepted Answer

A)  can increase price and increase output at the same time. 
B)  can charge any price it wants and still sell all of its output. 
C)  can sell any output it produces provided it accepts the market price. 
D)  must lower price in order to increase output. 
A)  can increase price and increase output at the same time. 
B)  can charge any price it wants and still sell all of its output. 
C)  can sell any output it produces provided it accepts the market price. 
D)  must lower price in order to increase output.

Question 19

Marginal revenue can be:

Accepted Answer

A)  never negative. 
B)  always positive. 
C)  only zero. 
D)  zero, positive or negative. 
A)  never negative. 
B)  always positive. 
C)  only zero. 
D)  zero, positive or negative.

Question 20

The most effective barrier/s to protect a monopoly from competition is/are:

Accepted Answer

A)  legal barriers or government ownership. 
B)  excessive advertising by the monopoly. 
C)  higher wages paid to the monopoly's workers. 
D)  the high quality product offered by a monopoly. 
A)  legal barriers or government ownership. 
B)  excessive advertising by the monopoly. 
C)  higher wages paid to the monopoly's workers. 
D)  the high quality product offered by a monopoly.

Bus services often offer lower prices for students and pensioners because:

In contrast to a perfectly competitive firm, a monopolist operates in the long run at a quantity of output at which:

For a monopolist to practise price discrimination, one necessary condition is that the product offered for sale must be:

Which barrier to entry results in the creation of a natural monopoly?

Competition means:

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

A recent study has concluded that working adults have a price elasticity of demand of 1.72 for train services, while pensioners have a price elasticity of demand of 3.74. If price discrimination is possible, then the company providing the train service will:

A casino is often protected by license because:

Narrbegin Exhibit 8.6 Monopolist -According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $10, what would you advise Rudd to do?

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves. If the price is between its average variable cost and average total cost curves, the firm will:

Narrbegin Exhibit 8.6 Monopolist -According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $8, what would you advise Rudd to do?

At a price of $5, 24 units of a good would be sold. At a price of $10, 25 units of output would be sold. The marginal revenue of the 25th unit of output is:

Narrbegin Exhibit 8.3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 8.3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

The only hairdresser in a small town is an example of:

Which of the following statements is true?

The monopolist can choose:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, the price a monopolist would charge is:

A single priced monopoly:

Marginal revenue can be:

The most effective barrier/s to protect a monopoly from competition is/are:

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

Exam 9: Monopoly

Bus services often offer lower prices for students and pensioners because:

In contrast to a perfectly competitive firm, a monopolist operates in the long run at a quantity of output at which:

For a monopolist to practise price discrimination, one necessary condition is that the product offered for sale must be:

Which barrier to entry results in the creation of a natural monopoly?

Competition means:

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

A recent study has concluded that working adults have a price elasticity of demand of 1.72 for train services, while pensioners have a price elasticity of demand of 3.74. If price discrimination is possible, then the company providing the train service will:

A casino is often protected by license because:

Narrbegin Exhibit 8.6 Monopolist -According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $10, what would you advise Rudd to do?

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves. If the price is between its average variable cost and average total cost curves, the firm will:

Narrbegin Exhibit 8.6 Monopolist -According to the information provided in Exhibit 8.6, if the Rudd Ice Company is a monopoly and is currently charging a price of $8, what would you advise Rudd to do?

At a price of $5, 24 units of a good would be sold. At a price of $10, 25 units of output would be sold. The marginal revenue of the 25th unit of output is:

Narrbegin Exhibit 8.3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 8.3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

The only hairdresser in a small town is an example of:

Which of the following statements is true?

The monopolist can choose:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, the price a monopolist would charge is:

A single priced monopoly:

Marginal revenue can be:

The most effective barrier/s to protect a monopoly from competition is/are:

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