Question 1

When the number of substitutes increase, the demand curve for a monopolist will

Accepted Answer

A)  not change. 
B)  become more elastic. 
C)  become more inelastic. 
D)  become steeper. 
A)  not change. 
B)  become more elastic. 
C)  become more inelastic. 
D)  become steeper.

Question 2

Which of the following would best describe the demand curve faced by a monopoly firm?

Accepted Answer

A)  horizontal line at the market price 
B)  vertical line at the output level 
C)  same as the market demand curve 
D)  same as the perfect competitor's demand curve 
A)  horizontal line at the market price 
B)  vertical line at the output level 
C)  same as the market demand curve 
D)  same as the perfect competitor's demand curve

Question 3

Compared to perfectly competitive firms, the demand curve for a monopolist will be

Accepted Answer

A)  as elastic. 
B)  more elastic. 
C)  less elastic. 
D)  perfectly elastic. 
A)  as elastic. 
B)  more elastic. 
C)  less elastic. 
D)  perfectly elastic.

Question 4

The profit-maximizing price of the monopolist compared to the perfectly competitive industry in the above figure are, respectively

Accepted Answer

A)  P1 and P3. 
B)  P1 and P5. 
C)  P1 and P2. 
D)  P2 and P5. 
A)  P1 and P3. 
B)  P1 and P5. 
C)  P1 and P2. 
D)  P2 and P5.

Question 5

-The profit-maximizing price and quantity established by a perfectly competitive firm in the above figure are

Accepted Answer

A)  Q1 units of output and a price of P5. 
B)  Q3 units of output and a price of P3. 
C)  Q1 units of output and a price of P1. 
D)  Q4 units of output and a price of P4. 
A)  Q1 units of output and a price of P5. 
B)  Q3 units of output and a price of P3. 
C)  Q1 units of output and a price of P1. 
D)  Q4 units of output and a price of P4.

Question 6

-In the above figure, what is total revenue at the profit-maximizing point?

Accepted Answer

A)  $182 
B)  $126 
C)  $170 
D)  $176 
A)  $182 
B)  $126 
C)  $170 
D)  $176

Question 7

A monopoly sells 10 units of output at $10. If the MR of the 11th unit is $4.50, then the price of the 11th unit is

Accepted Answer

A)  also $10. 
B)  $9.50. 
C)  greater than $10. 
D)  $7.25. 
A)  also $10. 
B)  $9.50. 
C)  greater than $10. 
D)  $7.25.

Question 8

When it takes one firm in an industry to produce the quantity necessary to realize low unit costs, the industry

Accepted Answer

A)  experiences economies of scale. 
B)  has barriers to entry due to ownership of resources. 
C)  has no barrier to entry. 
D)  has a license granted by the government. 
A)  experiences economies of scale. 
B)  has barriers to entry due to ownership of resources. 
C)  has no barrier to entry. 
D)  has a license granted by the government.

Question 9

A firm that is the only seller of a good with no close substitutes is a(n)

Accepted Answer

A)  perfect competitor. 
B)  monopolistic competitor. 
C)  oligopolist. 
D)  monopolist. 
A)  perfect competitor. 
B)  monopolistic competitor. 
C)  oligopolist. 
D)  monopolist.

Question 10

All of the following are barriers to entry in an industry EXCEPT

Accepted Answer

A)  a patent. 
B)  governmental restrictions. 
C)  low marginal tax rates. 
D)  economies of scale. 
A)  a patent. 
B)  governmental restrictions. 
C)  low marginal tax rates. 
D)  economies of scale.

Question 11

The portion of consumer surplus that would have existed in a perfectly competitive market but is unobtainable by anyone in society under a monopoly is known as

Accepted Answer

A)  monopoly profits. 
B)  an unattainable surplus. 
C)  a deadweight loss. 
D)  an external cost. 
A)  monopoly profits. 
B)  an unattainable surplus. 
C)  a deadweight loss. 
D)  an external cost.

Question 12

If a government imposes high enough tariffs, one result will be that

Accepted Answer

A)  foreign producers will be able to sell more goods. 
B)  domestic producers will face no foreign competition. 
C)  consumers will benefit from lower prices. 
D)  markets will become more globalized. 
A)  foreign producers will be able to sell more goods. 
B)  domestic producers will face no foreign competition. 
C)  consumers will benefit from lower prices. 
D)  markets will become more globalized.

Question 13

Successive downward movements along the demand curve for the product of a monopolist always generate successive

Accepted Answer

A)  increases in the monopolist's marginal revenue. 
B)  increases in the monopolist's average total costs. 
C)  decreases in the additional per-unit costs incurred by the monopolist. 
D)  decreases in the additional per-unit revenues earned by the monopolist. 
A)  increases in the monopolist's marginal revenue. 
B)  increases in the monopolist's average total costs. 
C)  decreases in the additional per-unit costs incurred by the monopolist. 
D)  decreases in the additional per-unit revenues earned by the monopolist.

Question 14

What is the main difference between the demand curves for the perfect competitor and the monopolist?

Accepted Answer

The perfect competitor faces a horizonta

Question 15

Smartphone companies protect their monopolies over new products they develop by utilizing

Accepted Answer

A)  patent protection. 
B)  low cost production. 
C)  diseconomies of scale. 
D)  zero economic profits in the long run. 
A)  patent protection. 
B)  low cost production. 
C)  diseconomies of scale. 
D)  zero economic profits in the long run.

Question 16

Which of the following is issued to an investor to provide protection from having the invention copied or stolen for 20 years?

Accepted Answer

A)  a license 
B)  a natural monopoly 
C)  a patent 
D)  a certificate of convenience 
A)  a license 
B)  a natural monopoly 
C)  a patent 
D)  a certificate of convenience

Question 17

When TR is increasing as a monopolist's output increases

Accepted Answer

A)  MR is negative. 
B)  MR is positive. 
C)  MR = 0. 
D)  MR may be positive or negative. 
A)  MR is negative. 
B)  MR is positive. 
C)  MR = 0. 
D)  MR may be positive or negative.

Question 18

A deadweight loss occurs in a

Accepted Answer

A)  monopoly. 
B)  perfectly competitive market. 
C)  market in which the market clearing price of a good equals the marginal cost of producing it. 
D)  market in which the market clearing price of a good is below the marginal cost of producing it. 
A)  monopoly. 
B)  perfectly competitive market. 
C)  market in which the market clearing price of a good equals the marginal cost of producing it. 
D)  market in which the market clearing price of a good is below the marginal cost of producing it.

Question 19

Economies of scale will lead to only one firm in the industry because

Accepted Answer

A)  by increasing output a firm is able to lower the cost per unit and charge lower prices driving smaller firms out of business. 
B)  one firm has an average cost curve, which has shifted below the average cost curves of its competitors. 
C)  there are governmental entry restrictions. 
D)  of government licensing. 
A)  by increasing output a firm is able to lower the cost per unit and charge lower prices driving smaller firms out of business. 
B)  one firm has an average cost curve, which has shifted below the average cost curves of its competitors. 
C)  there are governmental entry restrictions. 
D)  of government licensing.

Question 20

Which of the following is NOT true about a certificate of convenience and public necessity?

Accepted Answer

A)  It is a barrier to entry. 
B)  It is a patent. 
C)  It is issued by a government agency. 
D)  It limits competition. 
A)  It is a barrier to entry. 
B)  It is a patent. 
C)  It is issued by a government agency. 
D)  It limits competition.

Exam 24: Monopoly

When the number of substitutes increase, the demand curve for a monopolist will

Which of the following would best describe the demand curve faced by a monopoly firm?

Compared to perfectly competitive firms, the demand curve for a monopolist will be

The profit-maximizing price of the monopolist compared to the perfectly competitive industry in the above figure are, respectively

-The profit-maximizing price and quantity established by a perfectly competitive firm in the above figure are

-In the above figure, what is total revenue at the profit-maximizing point?

A monopoly sells 10 units of output at $10. If the MR of the 11th unit is $4.50, then the price of the 11th unit is

When it takes one firm in an industry to produce the quantity necessary to realize low unit costs, the industry

A firm that is the only seller of a good with no close substitutes is a(n)

All of the following are barriers to entry in an industry EXCEPT

The portion of consumer surplus that would have existed in a perfectly competitive market but is unobtainable by anyone in society under a monopoly is known as

If a government imposes high enough tariffs, one result will be that

Successive downward movements along the demand curve for the product of a monopolist always generate successive

What is the main difference between the demand curves for the perfect competitor and the monopolist?

Smartphone companies protect their monopolies over new products they develop by utilizing

Which of the following is issued to an investor to provide protection from having the invention copied or stolen for 20 years?

When TR is increasing as a monopolist's output increases

A deadweight loss occurs in a

Economies of scale will lead to only one firm in the industry because

Which of the following is NOT true about a certificate of convenience and public necessity?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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