Question 1

Price discrimination explains why Ivy League universities often base tuition costs on students'

Accepted Answer

A)  age. 
B)  financial resources. 
C)  high school GPA. 
D)  gender. 
A)  age. 
B)  financial resources. 
C)  high school GPA. 
D)  gender.

Question 2

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Accepted Answer

A)  can prevent children from buying the lower-priced tickets and selling them to adults. 
B)  has some degree of monopoly pricing power. 
C)  can easily distinguish between the two groups of customers. 
D)  All of the above are correct. 
A)  can prevent children from buying the lower-priced tickets and selling them to adults. 
B)  has some degree of monopoly pricing power. 
C)  can easily distinguish between the two groups of customers. 
D)  All of the above are correct.

Question 3

Figure 15-12  
-Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Accepted Answer

A)  A+B 
B)  C+F 
C)  G 
D)  A+B+C+F 
A)  A+B 
B)  C+F 
C)  G 
D)  A+B+C+F

Question 4

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Accepted Answer

A)  $200 
B)  $400 
C)  $600 
D)  $800 
A)  $200 
B)  $400 
C)  $600 
D)  $800

Question 5

Table 15-20
A monopolist faces the following demand curve:
  
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, how much output should the firm produce in order to maximize profit?

Accepted Answer

A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units 
A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units

Question 6

For a monopoly,

Accepted Answer

A)  average revenue exceeds marginal revenue. 
B)  average revenue equals marginal revenue. 
C)  average revenue is less than marginal revenue. 
D)  price equals marginal revenue. 
A)  average revenue exceeds marginal revenue. 
B)  average revenue equals marginal revenue. 
C)  average revenue is less than marginal revenue. 
D)  price equals marginal revenue.

Question 7

A monopolist faces the following demand curve:   The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Accepted Answer

A)  400 
B)  500 
C)  900 
D)  4,200 
A)  400 
B)  500 
C)  900 
D)  4,200

Question 8

A monopoly is an inefficient way to produce a product because

Accepted Answer

A)  it can earn both short-run and long-run profits. 
B)  it faces a downward-sloping demand curve. 
C)  the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. 
D)  it produces a smaller level of output than would be produced in a competitive market. 
A)  it can earn both short-run and long-run profits. 
B)  it faces a downward-sloping demand curve. 
C)  the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. 
D)  it produces a smaller level of output than would be produced in a competitive market.

Question 9

Which of the following is not a characteristic of a monopoly?

Accepted Answer

A)  the seller has market power 
B)  one seller 
C)  free entry and exit 
D)  a product without close substitutes 
A)  the seller has market power 
B)  one seller 
C)  free entry and exit 
D)  a product without close substitutes

Question 10

Which of the following statements is are) true of a monopoly? i) A monopoly has the ability to set the price of its product at whatever level it desires.
Ii) A monopoly's total revenue will always increase when it increases the price of its product.
Iii) The more a monopoly increases output, the higher the profits.

Accepted Answer

A)  i) only 
B)  ii) only 
C)  i) and ii) only 
D)  ii) and iii) only 
A)  i) only 
B)  ii) only 
C)  i) and ii) only 
D)  ii) and iii) only

Question 11

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus. 
A)  quantity supplied. 
B)  supply price. 
C)  deadweight loss. 
D)  producer surplus.

Question 12

Patent and copyright laws encourage

Accepted Answer

A)  creative activity. 
B)  lower prices due to decreasing average total costs. 
C)  competition among firms. 
D)  All of the above are correct. 
A)  creative activity. 
B)  lower prices due to decreasing average total costs. 
C)  competition among firms. 
D)  All of the above are correct.

Question 13

A benefit of a monopoly is

Accepted Answer

A)  lower prices. 
B)  a wide variety of similar products. 
C)  decreasing long-run average total costs. 
D)  greater creativity by authors who can copyright their novels. 
A)  lower prices. 
B)  a wide variety of similar products. 
C)  decreasing long-run average total costs. 
D)  greater creativity by authors who can copyright their novels.

Question 14

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Accepted Answer

A)  price segregation. 
B)  price discrimination. 
C)  arbitrage. 
D)  monopoly pricing. 
A)  price segregation. 
B)  price discrimination. 
C)  arbitrage. 
D)  monopoly pricing.

Question 15

Table 15-1
  
-Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Accepted Answer

A)  $3 
B)  $5 
C)  $11 
D)  $17 
A)  $3 
B)  $5 
C)  $11 
D)  $17

Question 16

Figure 15-1  
-Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  diminishing marginal product. 
D)  increasing marginal cost. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  diminishing marginal product. 
D)  increasing marginal cost.

Question 17

Table 15-9
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A)  $4 
B)  $14 
C)  $31 
D)  $62 
A)  $4 
B)  $14 
C)  $31 
D)  $62

Question 18

A natural monopoly has economies of scale for most if not all of its range of output.

Accepted Answer

A) True 
 B)False

Question 19

Figure 15-25  
-Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

Accepted Answer

The answer of Figure 15-25  
-Refer to Figure 15-25....

Question 20

A monopolist's profit is equal to Price - Marginal Cost) × Quantity.

Accepted Answer

A) True 
 B)False

Exam 14: Monopoly

Price discrimination explains why Ivy League universities often base tuition costs on students'

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, how much output should the firm produce in order to maximize profit?

For a monopoly,

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

A monopoly is an inefficient way to produce a product because

Which of the following is not a characteristic of a monopoly?

The amount that producers receive for a good minus their costs of producing it equals

Patent and copyright laws encourage

A benefit of a monopoly is

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

A natural monopoly has economies of scale for most if not all of its range of output.

Figure 15-25 -Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

A monopolist's profit is equal to Price - Marginal Cost) × Quantity.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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