Question 1

Patents are currently granted for a period of 20 years in the United States.Do you think that time period is too long or too short? Explain your reasoning.

Accepted Answer

Answers will vary, but should

Question 2

A monopoly firm will earn economic profits whenever:

Accepted Answer

A) marginal revenue exceeds marginal cost. 
B) marginal revenue equals marginal cost. 
C) marginal revenue is less than marginal cost. 
D) marginal revenue is greater than average cost. 
E) average revenue is greater than average cost. 
A) marginal revenue exceeds marginal cost. 
B) marginal revenue equals marginal cost. 
C) marginal revenue is less than marginal cost. 
D) marginal revenue is greater than average cost. 
E) average revenue is greater than average cost.

Question 3

At a given output level, a monopolist earns a profit only if:

Accepted Answer

A) the slope of the total revenue curve exceeds the slope of the total cost curve. 
B) the height of the marginal revenue curve at the output produced exceeds the height of the marginal cost curve at that output. 
C) the height of the demand curve at the output produced exceeds the height of the marginal revenue curve at that output. 
D) the height of the demand curve at the output produced exceeds the height of the average total cost curve at that output. 
A) the slope of the total revenue curve exceeds the slope of the total cost curve. 
B) the height of the marginal revenue curve at the output produced exceeds the height of the marginal cost curve at that output. 
C) the height of the demand curve at the output produced exceeds the height of the marginal revenue curve at that output. 
D) the height of the demand curve at the output produced exceeds the height of the average total cost curve at that output.

Question 4

Which of the following is not a source of monopoly?

Accepted Answer

A) technologies that allow each of many small firms to produce at the same per-unit costs as one large firm 
B) patents 
C) control of crucial inputs 
D) government licensing requirements 
A) technologies that allow each of many small firms to produce at the same per-unit costs as one large firm 
B) patents 
C) control of crucial inputs 
D) government licensing requirements

Question 5

Figure 8-D  
-Refer to Figure 8-D.Identify the area of the welfare loss due to monopoly pricing and output practices.

Accepted Answer

A) ACDB 
B) DCB 
C) ACB 
D) DAP1P4 
E) DBQ3Q1 
A) ACDB 
B) DCB 
C) ACB 
D) DAP1P4 
E) DBQ3Q1

Question 6

Figure 8-A  
-Refer to Figure 8-A.The profit-maximizing firm's total revenue is indicated in the diagram as area:

Accepted Answer

A) 0CEQ1. 
B) 0BFQ2. 
C) 0ADQ1. 
D) CADE. 
E) 0CGQ3. 
A) 0CEQ1. 
B) 0BFQ2. 
C) 0ADQ1. 
D) CADE. 
E) 0CGQ3.

Question 7

Ceteris paribus, in which of the following cases would we expect economic profits to be greatest?

Accepted Answer

A) an unregulated monopolist who is able to price discriminate. 
B) an unregulated monopolist who is unable to price discriminate. 
C) a regulated monopolist required to charge a price no greater than marginal cost. 
D) a regulated monopolist required to charge a price no greater than average cost. 
A) an unregulated monopolist who is able to price discriminate. 
B) an unregulated monopolist who is unable to price discriminate. 
C) a regulated monopolist required to charge a price no greater than marginal cost. 
D) a regulated monopolist required to charge a price no greater than average cost.

Question 8

If a firm seeks to maximize profits, it should produce the quantity where:

Accepted Answer

A) marginal revenue equals zero. 
B) elasticity of demand is less than one. 
C) elasticity of demand is greater than one. 
D) marginal revenue is maximized. 
E) average total cost is minimized. 
A) marginal revenue equals zero. 
B) elasticity of demand is less than one. 
C) elasticity of demand is greater than one. 
D) marginal revenue is maximized. 
E) average total cost is minimized.

Question 9

Figure 8-C
The following diagram contains information on cost and revenue curves facing a regulated monopoly.  
-Refer to Figure 8-C.If regulators set a price according to marginal-cost pricing, the firm will:

Accepted Answer

A) earn positive economic profits. 
B) make zero economic profits. 
C) suffer an economic loss. 
D) earn the same level of profits as it would absent regulation. 
A) earn positive economic profits. 
B) make zero economic profits. 
C) suffer an economic loss. 
D) earn the same level of profits as it would absent regulation.

Question 10

Figure 9-I
  
-Which of the following is a characteristic of a monopoly?

Accepted Answer

A) a large number of sellers 
B) homogeneous products 
C) larger barriers to entry 
D) price taking firms 
A) a large number of sellers 
B) homogeneous products 
C) larger barriers to entry 
D) price taking firms

Question 11

Which of the following is true of monopoly but not true of perfect competition?

Accepted Answer

A) Firms can potentially earn economic profits in the short run. 
B) Total revenue is the product of price times the quantity sold. 
C) Firms can potentially earn economic profits in the long run. 
D) A profit-maximizing firm will shut down if price falls below the average variable cost. 
A) Firms can potentially earn economic profits in the short run. 
B) Total revenue is the product of price times the quantity sold. 
C) Firms can potentially earn economic profits in the long run. 
D) A profit-maximizing firm will shut down if price falls below the average variable cost.

Question 12

Which of the following is a problem with government regulation of natural monopolies?

Accepted Answer

A) creation of excessive profits levels 
B) reduced incentives to cut costs 
C) decreased number of firms in the market 
D) lack of influence from special interest groups 
A) creation of excessive profits levels 
B) reduced incentives to cut costs 
C) decreased number of firms in the market 
D) lack of influence from special interest groups

Question 13

A price-discriminating monopolist will tend to charge a higher price to senior citizens if it believes that senior citizens:

Accepted Answer

A) have a lower willingness to pay than other demanders. 
B) have a greater willingness to pay than other demanders. 
C) have very elastic demand curves. 
D) have horizontal demand curves. 
A) have a lower willingness to pay than other demanders. 
B) have a greater willingness to pay than other demanders. 
C) have very elastic demand curves. 
D) have horizontal demand curves.

Question 14

Which of the following is true of successful price discriminators?

Accepted Answer

A) They make greater profits than by charging everyone a uniform price 
B) Their customers must have different willingness to pay. 
C) Their customers must have difficulty reselling the good to other customers. 
D) They must have some monopoly power. 
E) All of the above are true of successful price discriminators 
A) They make greater profits than by charging everyone a uniform price 
B) Their customers must have different willingness to pay. 
C) Their customers must have difficulty reselling the good to other customers. 
D) They must have some monopoly power. 
E) All of the above are true of successful price discriminators

Question 15

A key element to preserving a monopoly is:

Accepted Answer

A) government subsidization of critical enterprises. 
B) keeping potential rivals out of the market. 
C) guaranteeing the availability of substitute products. 
D) increased advertising expenditures. 
A) government subsidization of critical enterprises. 
B) keeping potential rivals out of the market. 
C) guaranteeing the availability of substitute products. 
D) increased advertising expenditures.

Question 16

Table 8-A
 $$\begin{array} { c c c } 
\text { Quantity } & \text { Total Revenue } & \text { Total Cost } \
8 & 95 & 90 \
9 & 105 & 93 \
10 & 114 & 98 \
11 & 122 & 105 \
12 & 129 & 114
\end{array}$$
-Refer to Table 8-A.Average total cost at the profit-maximizing level of output is equal to:

Accepted Answer

A) $9.55. 
B) $9.80. 
C) $10.33. 
D) $11.25. 
E) none of the above. 
A) $9.55. 
B) $9.80. 
C) $10.33. 
D) $11.25. 
E) none of the above.

Question 17

What is the maximum amount of profit that the firm below could generate?

Accepted Answer

A) -$2,800 
B) $2,400 
C) $2,480 
D) $2,880 
E) $5,280 
A) -$2,800 
B) $2,400 
C) $2,480 
D) $2,880 
E) $5,280

Question 18

Figure 9-I
  
-A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

Accepted Answer

A) True 
 B)False

Question 19

"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer.

Accepted Answer

This statement is not True. An

Question 20

When setting prices, the monopolist may choose to charge alternative customers different prices based on:

Accepted Answer

A) geographical location. 
B) age. 
C) income. 
D) all of the above. 
A) geographical location. 
B) age. 
C) income. 
D) all of the above.

Patents are currently granted for a period of 20 years in the United States.Do you think that time period is too long or too short? Explain your reasoning.

A monopoly firm will earn economic profits whenever:

At a given output level, a monopolist earns a profit only if:

Which of the following is not a source of monopoly?

Figure 8-D -Refer to Figure 8-D.Identify the area of the welfare loss due to monopoly pricing and output practices.

Figure 8-A -Refer to Figure 8-A.The profit-maximizing firm's total revenue is indicated in the diagram as area:

Ceteris paribus, in which of the following cases would we expect economic profits to be greatest?

If a firm seeks to maximize profits, it should produce the quantity where:

Figure 8-C The following diagram contains information on cost and revenue curves facing a regulated monopoly. -Refer to Figure 8-C.If regulators set a price according to marginal-cost pricing, the firm will:

Figure 9-I -Which of the following is a characteristic of a monopoly?

Which of the following is true of monopoly but not true of perfect competition?

Which of the following is a problem with government regulation of natural monopolies?

A price-discriminating monopolist will tend to charge a higher price to senior citizens if it believes that senior citizens:

Which of the following is true of successful price discriminators?

A key element to preserving a monopoly is:

Table 8-A Quantity Total Revenue Total Cost 8 95 90 9 105 93 10 114 98 11 122 105 12 129 114 -Refer to Table 8-A.Average total cost at the profit-maximizing level of output is equal to:

What is the maximum amount of profit that the firm below could generate?

Figure 9-I -A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer.

When setting prices, the monopolist may choose to charge alternative customers different prices based on:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

Exam 8: Monopoly

Patents are currently granted for a period of 20 years in the United States.Do you think that time period is too long or too short? Explain your reasoning.

A monopoly firm will earn economic profits whenever:

At a given output level, a monopolist earns a profit only if:

Which of the following is not a source of monopoly?

Figure 8-D -Refer to Figure 8-D.Identify the area of the welfare loss due to monopoly pricing and output practices.

Figure 8-A -Refer to Figure 8-A.The profit-maximizing firm's total revenue is indicated in the diagram as area:

Ceteris paribus, in which of the following cases would we expect economic profits to be greatest?

If a firm seeks to maximize profits, it should produce the quantity where:

Figure 8-C The following diagram contains information on cost and revenue curves facing a regulated monopoly. -Refer to Figure 8-C.If regulators set a price according to marginal-cost pricing, the firm will:

Figure 9-I -Which of the following is a characteristic of a monopoly?

Which of the following is true of monopoly but not true of perfect competition?

Which of the following is a problem with government regulation of natural monopolies?

A price-discriminating monopolist will tend to charge a higher price to senior citizens if it believes that senior citizens:

Which of the following is true of successful price discriminators?

A key element to preserving a monopoly is:

Table 8-A Quantity Total Revenue Total Cost 8 95 90 9 105 93 10 114 98 11 122 105 12 129 114 -Refer to Table 8-A.Average total cost at the profit-maximizing level of output is equal to:

What is the maximum amount of profit that the firm below could generate?

Figure 9-I -A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer.

When setting prices, the monopolist may choose to charge alternative customers different prices based on:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters