Question 1

What type of protection does U.S.law grant the creator of a book,film or piece of music?

Accepted Answer

A)  A public franchise, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death. 
B)  A copyright, which grants exclusive rights to the creation's author for 20 years after the work is created. 
C)  A patent, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death. 
D)  A copyright, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death. 
A)  A public franchise, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death. 
B)  A copyright, which grants exclusive rights to the creation's author for 20 years after the work is created. 
C)  A patent, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death. 
D)  A copyright, which grants the exclusive right to use the creation during the author's lifetime and to his or her heirs for 70 years after the author's death.

Question 2

The first important law regulating monopolies in the United States was

Accepted Answer

A)  the Grant Act, which was passed in 1890. 
B)  the Clayton Act, which was passed in 1890. 
C)  the Sherman Act, which was passed in 1890. 
D)  the Federal Trade Commission Act, which was passed in 1914. 
A)  the Grant Act, which was passed in 1890. 
B)  the Clayton Act, which was passed in 1890. 
C)  the Sherman Act, which was passed in 1890. 
D)  the Federal Trade Commission Act, which was passed in 1914.

Question 3

Figure 15-17  
-Refer to Figure 15-17 to answer the following questions.
a.What quantity will this monopoly produce and what price will it charge?
b.Suppose the government decides to regulate this monopoly and imposes a price ceiling of $25.Now what quantity will the monopoly produce and what price will it charge?
c.Will every consumer who is willing to pay the ceiling price of $25 be able to buy the product? Briefly explain.

Accepted Answer

a.To maximize profits,the monopoly will

Question 4

In 1935,the U.S.Patent and Trademark Office issued Parker Brothers a trademark on the use of the name Monopoly for a board game.Hasbro bought Parker Brothers in 1991.Which of the following statements is true regarding the trademark on the name Monopoly for a board game?

Accepted Answer

A)  The original trademark expired well before Hasbro bought Parker Brothers, so they never had a trademark on Monopoly. 
B)  Trademarks never expire, so Hasbro continues to have a trademark on the name Monopoly. 
C)  The trademark expired in 2011, 20 years after Hasbro's purchase of Parker Brothers. 
D)  The trademark expired in 1955, 20 years after the trademark was issued to Parker Brothers. 
A)  The original trademark expired well before Hasbro bought Parker Brothers, so they never had a trademark on Monopoly. 
B)  Trademarks never expire, so Hasbro continues to have a trademark on the name Monopoly. 
C)  The trademark expired in 2011, 20 years after Hasbro's purchase of Parker Brothers. 
D)  The trademark expired in 1955, 20 years after the trademark was issued to Parker Brothers.

Question 5

Figure 15-9   Figure 15-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-9.What is the economically efficient output level?

Accepted Answer

A)  600 units 
B)  800 units 
C)  940 units 
D)  1160 units 
A)  600 units 
B)  800 units 
C)  940 units 
D)  1160 units

Question 6

A monopoly is a seller of a product

Accepted Answer

A)  with many substitutes. 
B)  without a close substitute. 
C)  with a perfectly inelastic demand. 
D)  without a well-defined demand curve. 
A)  with many substitutes. 
B)  without a close substitute. 
C)  with a perfectly inelastic demand. 
D)  without a well-defined demand curve.

Question 7

Suppose a monopoly is producing its profit-maximizing output level.Now suppose the government imposes a lump-sum tax on the monopoly,independent of its output.As a result the monopolist will increase the price of its product to cover its higher cost.

Accepted Answer

A) True 
 B)False

Question 8

There are several types of barriers to entry that can create a monopoly.Which of the following barriers is the result of government action?

Accepted Answer

A)  network externalities 
B)  public franchise 
C)  economies of scale 
D)  control of a key resource 
A)  network externalities 
B)  public franchise 
C)  economies of scale 
D)  control of a key resource

Question 9

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Accepted Answer

A) True 
 B)False

Question 10

Figure 15-4   Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4.What is the amount of the monopoly's total cost of production?

Accepted Answer

A)  $21,600 
B)  $17,700 
C)  $9,340 
D)  $7,800 
A)  $21,600 
B)  $17,700 
C)  $9,340 
D)  $7,800

Question 11

Which of the following statements is true?

Accepted Answer

A)  Monopolists are price makers. All other firms are price takers. 
B)  Unlike other industries, monopoly industries have high barriers to entry. 
C)  Only monopoly firms are granted patents and copyrights. 
D)  Unlike other firms, a monopolist's demand curve is the same as the market demand curve. 
A)  Monopolists are price makers. All other firms are price takers. 
B)  Unlike other industries, monopoly industries have high barriers to entry. 
C)  Only monopoly firms are granted patents and copyrights. 
D)  Unlike other firms, a monopolist's demand curve is the same as the market demand curve.

Question 12

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

Accepted Answer

A)  Price will be higher, output will be lower and the deadweight loss will be eliminated. 
B)  Consumer surplus will be smaller, producer surplus will be greater and there will be a reduction in economic efficiency. 
C)  Price will be higher, consumer surplus will be greater and output will be greater. 
D)  Consumer surplus will be smaller and producer surplus will be greater. There will be a net increase in economic surplus. 
A)  Price will be higher, output will be lower and the deadweight loss will be eliminated. 
B)  Consumer surplus will be smaller, producer surplus will be greater and there will be a reduction in economic efficiency. 
C)  Price will be higher, consumer surplus will be greater and output will be greater. 
D)  Consumer surplus will be smaller and producer surplus will be greater. There will be a net increase in economic surplus.

Question 13

The United States Post Office

Accepted Answer

A)  faces no competition for its mail services. 
B)  has a monopoly in the provision of first-class mail service. 
C)  can safely ignore the prices for mail services charges by its rivals such as FedEx and UPS. 
D)  is an example of a monopoly that results from the ownership of a key resource: first class mail service. 
A)  faces no competition for its mail services. 
B)  has a monopoly in the provision of first-class mail service. 
C)  can safely ignore the prices for mail services charges by its rivals such as FedEx and UPS. 
D)  is an example of a monopoly that results from the ownership of a key resource: first class mail service.

Question 14

Market power refers to

Accepted Answer

A)  the ability of consumers to dictate what products should be produced. 
B)  the ability of a firm to advertise its product and succeed in selling more output. 
C)  the ability of a firm to sell at a lower price than rival sellers. 
D)  the ability of a firm to charge a price higher than the marginal cost of production. 
A)  the ability of consumers to dictate what products should be produced. 
B)  the ability of a firm to advertise its product and succeed in selling more output. 
C)  the ability of a firm to sell at a lower price than rival sellers. 
D)  the ability of a firm to charge a price higher than the marginal cost of production.

Question 15

Which two factors make regulating mergers complicated?

Accepted Answer

A)  First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge. 
B)  First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms. 
C)  First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed. 
D)  First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually. 
A)  First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge. 
B)  First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms. 
C)  First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed. 
D)  First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually.

Question 16

The term "trust" in antitrust refers to a board of trustees that has collusive control over different companies.

Accepted Answer

A) True 
 B)False

Question 17

Economists played a key role in the development of merger guidelines by the Department of Justice and the Federal Trade Commission in 1982.These guidelines have three main parts.What are these parts?

Accepted Answer

A)  concentration ratios; the Herfindahl-Hirschman Index; market standards 
B)  concentration standards; concentration ratios; competitive analysis 
C)  economic analysis; political analysis; dynamic analysis 
D)  market definition; measure of concentration; merger standards 
A)  concentration ratios; the Herfindahl-Hirschman Index; market standards 
B)  concentration standards; concentration ratios; competitive analysis 
C)  economic analysis; political analysis; dynamic analysis 
D)  market definition; measure of concentration; merger standards

Question 18

The International Nickel Company of Canada is often cited as an example of monopoly,but International Nickel eventually lost its monopoly.What event was responsible for this?

Accepted Answer

A)  New technology allowed other firms to achieve network externalities after World War II. 
B)  The Canadian government, which had owned International Nickel, sold the company after World War II. The government no longer blocked entry into the market for nickel. 
C)  Competition in the market for nickel increased after nickel fields were developed in Russia after World War II. 
D)  Competition in the market for nickel increased after Canada signed the North American Free Trade Agreement with the United States and Mexico in 1994. 
A)  New technology allowed other firms to achieve network externalities after World War II. 
B)  The Canadian government, which had owned International Nickel, sold the company after World War II. The government no longer blocked entry into the market for nickel. 
C)  Competition in the market for nickel increased after nickel fields were developed in Russia after World War II. 
D)  Competition in the market for nickel increased after Canada signed the North American Free Trade Agreement with the United States and Mexico in 1994.

Question 19

Wendell can sell five motor homes per week at a price of $22,000.If he lowers the price of motor homes to $20,000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

Accepted Answer

A)  $10,000 
B)  $12,000 
C)  $20,000 
D)  $22,000 
A)  $10,000 
B)  $12,000 
C)  $20,000 
D)  $22,000

Question 20

A public franchise gives the exclusive right to produce a product for 20 years from the date the product is invented.

Accepted Answer

A) True 
 B)False

What type of protection does U.S.law grant the creator of a book,film or piece of music?

The first important law regulating monopolies in the United States was

In 1935,the U.S.Patent and Trademark Office issued Parker Brothers a trademark on the use of the name Monopoly for a board game.Hasbro bought Parker Brothers in 1991.Which of the following statements is true regarding the trademark on the name Monopoly for a board game?

Figure 15-9 Figure 15-9 shows the demand and cost curves for a monopolist. -Refer to Figure 15-9.What is the economically efficient output level?

A monopoly is a seller of a product

Suppose a monopoly is producing its profit-maximizing output level.Now suppose the government imposes a lump-sum tax on the monopoly,independent of its output.As a result the monopolist will increase the price of its product to cover its higher cost.

There are several types of barriers to entry that can create a monopoly.Which of the following barriers is the result of government action?

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Figure 15-4 Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4.What is the amount of the monopoly's total cost of production?

Which of the following statements is true?

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

The United States Post Office

Market power refers to

Which two factors make regulating mergers complicated?

The term "trust" in antitrust refers to a board of trustees that has collusive control over different companies.

Economists played a key role in the development of merger guidelines by the Department of Justice and the Federal Trade Commission in 1982.These guidelines have three main parts.What are these parts?

The International Nickel Company of Canada is often cited as an example of monopoly,but International Nickel eventually lost its monopoly.What event was responsible for this?

Wendell can sell five motor homes per week at a price of $22,000.If he lowers the price of motor homes to $20,000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

A public franchise gives the exclusive right to produce a product for 20 years from the date the product is invented.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 15: Monopoly and Antitrust Policy

What type of protection does U.S.law grant the creator of a book,film or piece of music?

The first important law regulating monopolies in the United States was

In 1935,the U.S.Patent and Trademark Office issued Parker Brothers a trademark on the use of the name Monopoly for a board game.Hasbro bought Parker Brothers in 1991.Which of the following statements is true regarding the trademark on the name Monopoly for a board game?

Figure 15-9 Figure 15-9 shows the demand and cost curves for a monopolist. -Refer to Figure 15-9.What is the economically efficient output level?

A monopoly is a seller of a product

Suppose a monopoly is producing its profit-maximizing output level.Now suppose the government imposes a lump-sum tax on the monopoly,independent of its output.As a result the monopolist will increase the price of its product to cover its higher cost.

There are several types of barriers to entry that can create a monopoly.Which of the following barriers is the result of government action?

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Figure 15-4 Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4.What is the amount of the monopoly's total cost of production?

Which of the following statements is true?

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

The United States Post Office

Market power refers to

Which two factors make regulating mergers complicated?

The term "trust" in antitrust refers to a board of trustees that has collusive control over different companies.

Economists played a key role in the development of merger guidelines by the Department of Justice and the Federal Trade Commission in 1982.These guidelines have three main parts.What are these parts?

The International Nickel Company of Canada is often cited as an example of monopoly,but International Nickel eventually lost its monopoly.What event was responsible for this?

Wendell can sell five motor homes per week at a price of $22,000.If he lowers the price of motor homes to $20,000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

A public franchise gives the exclusive right to produce a product for 20 years from the date the product is invented.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters