Question 1

Table 15-1
  
-Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Accepted Answer

A)  $17 
B)  $21 
C)  $23 
D)  $26 
A)  $17 
B)  $21 
C)  $23 
D)  $26

Question 2

During the holiday season, high-end retailers frequently place a high price on merchandise on weekends and discount the price during the week. They do this because they believe that two groups of customers exist: shoppers with little free time and bargain hunters. Bargain hunters have time to shop around and frequently shop during the week. What do economists call this price strategy used by high-end retailers?

Accepted Answer

A)  oligopoly 
B)  price discrimination 
C)  compensating differential 
D)  in-kind transfers 
A)  oligopoly 
B)  price discrimination 
C)  compensating differential 
D)  in-kind transfers

Question 3

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Accepted Answer

A)  antitrust laws 
B)  price discrimination 
C)  doing nothing 
D)  breaking up a natural monopoly into more than one firm 
A)  antitrust laws 
B)  price discrimination 
C)  doing nothing 
D)  breaking up a natural monopoly into more than one firm

Question 4

Figure 15-23  
-Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Accepted Answer

The answer of Figure 15-23  
-Refer to Figure 15-23....

Question 5

Figure 15-7  
-Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Accepted Answer

A)  9 units. 
B)  12 units. 
C)  15 units. 
D)  more than 15 units. 
A)  9 units. 
B)  12 units. 
C)  15 units. 
D)  more than 15 units.

Question 6

Monopolies are socially inefficient because the price they charge is

Accepted Answer

A)  equal to marginal revenue. 
B)  above marginal cost. 
C)  equal to demand. 
D)  above demand. 
A)  equal to marginal revenue. 
B)  above marginal cost. 
C)  equal to demand. 
D)  above demand.

Question 7

Figure 15-21  
-Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

Accepted Answer

A)  ABCE 
B)  0HIL 
C)  0FGK 
D)  None of the above is correct. 
A)  ABCE 
B)  0HIL 
C)  0FGK 
D)  None of the above is correct.

Question 8

Table 15-1
  
-Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Accepted Answer

A)  4 
B)  5 
C)  6 
D)  8 
A)  4 
B)  5 
C)  6 
D)  8

Question 9

Figure 15-1  
-Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Accepted Answer

A)  ownership of a key resource by a single firm 
B)  natural monopoly 
C)  government-created monopoly 
D)  a patent or copyright monopoly 
A)  ownership of a key resource by a single firm 
B)  natural monopoly 
C)  government-created monopoly 
D)  a patent or copyright monopoly

Question 10

A rational pricing strategy for a profit-maximizing monopolist is

Accepted Answer

A)  price discrimination. 
B)  price segregation. 
C)  synergy pricing. 
D)  average cost pricing. 
A)  price discrimination. 
B)  price segregation. 
C)  synergy pricing. 
D)  average cost pricing.

Question 11

The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Accepted Answer

A)  public ownership of monopolies 
B)  government regulation of monopolies 
C)  government incentives to promote competition in monopolized industries 
D)  doing nothing at all 
A)  public ownership of monopolies 
B)  government regulation of monopolies 
C)  government incentives to promote competition in monopolized industries 
D)  doing nothing at all

Question 12

Figure 15-5  
-Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)  P2 x Q3. 
B)  P2-P4) x Q3. 
C)  P2-P5) x Q3. 
D)  P1-P6) x Q1. 
A)  P2 x Q3. 
B)  P2-P4) x Q3. 
C)  P2-P5) x Q3. 
D)  P1-P6) x Q1.

Question 13

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Accepted Answer

A) True 
 B)False

Question 14

Granting a pharmaceutical company a patent for a new medicine will lead to i) a product that is priced higher than it would be without the exclusive rights.
Ii) incentives for pharmaceutical companies to invest in research and development.
Iii) higher quantities of output than without the patent.

Accepted Answer

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

Question 15

A perfectly price-discriminating monopolist is able to

Accepted Answer

A)  maximize profit and produce a socially-optimal level of output. 
B)  maximize profit, but not produce a socially-optimal level of output. 
C)  produce a socially-optimal level of output, but not maximize profit. 
D)  exercise illegal preferences regarding the race and/or gender of its employees. 
A)  maximize profit and produce a socially-optimal level of output. 
B)  maximize profit, but not produce a socially-optimal level of output. 
C)  produce a socially-optimal level of output, but not maximize profit. 
D)  exercise illegal preferences regarding the race and/or gender of its employees.

Question 16

In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

Accepted Answer

A)  same is true. 
B)  supply curve conceptually makes sense, but in practice is never used. 
C)  supply curve will have limited predictive capacity. 
D)  decision about how much to supply is impossible to separate from the demand curve it faces. 
A)  same is true. 
B)  supply curve conceptually makes sense, but in practice is never used. 
C)  supply curve will have limited predictive capacity. 
D)  decision about how much to supply is impossible to separate from the demand curve it faces.

Question 17

When a firm's average total cost curve continually declines, the firm is a

Accepted Answer

A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct. 
A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct.

Table 15-1 -Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Figure 15-7 -Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Monopolies are socially inefficient because the price they charge is

Figure 15-21 -Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

Table 15-1 -Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

A rational pricing strategy for a profit-maximizing monopolist is

The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Granting a pharmaceutical company a patent for a new medicine will lead to i) a product that is priced higher than it would be without the exclusive rights. Ii) incentives for pharmaceutical companies to invest in research and development. Iii) higher quantities of output than without the patent.

A perfectly price-discriminating monopolist is able to

In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

When a firm's average total cost curve continually declines, the firm is a

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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Exam 14: Monopoly

Table 15-1 -Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Figure 15-7 -Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Monopolies are socially inefficient because the price they charge is

Figure 15-21 -Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

Table 15-1 -Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

A rational pricing strategy for a profit-maximizing monopolist is

The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Granting a pharmaceutical company a patent for a new medicine will lead to i) a product that is priced higher than it would be without the exclusive rights. Ii) incentives for pharmaceutical companies to invest in research and development. Iii) higher quantities of output than without the patent.

A perfectly price-discriminating monopolist is able to

In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

When a firm's average total cost curve continually declines, the firm is a

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

Filters