Question 1

A firm cannot price discriminate if it

Accepted Answer

A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government. 
A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government.

Question 2

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is
able to engage in perfect price discrimination.
  
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie?

Accepted Answer

A)  $80 
B)  $100 
C)  $110 
D)  $120 
A)  $80 
B)  $100 
C)  $110 
D)  $120

Question 3

Figure 15-19  
-Refer to Figure 15-19. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to

Accepted Answer

A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250. 
A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250.

Question 4

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Accepted Answer

A)  -$120.00. 
B)  -$75.40. 
C)  -$0.40. 
D)  $75.40. 
A)  -$120.00. 
B)  -$75.40. 
C)  -$0.40. 
D)  $75.40.

Question 5

Table 15-1
  
-Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity of output Q) will it produce and what price P) will it charge?

Accepted Answer

A)  Q = 4, P = $29 
B)  Q = 4, P = $26 
C)  Q = 5, P = $23 
D)  Q = 7, P = $17 
A)  Q = 4, P = $29 
B)  Q = 4, P = $26 
C)  Q = 5, P = $23 
D)  Q = 7, P = $17

Question 6

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
  
-Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40 
A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40

Question 7

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Accepted Answer

A)  false; price increases will mean fewer sales, which may lower profits. 
B)  true; this is the primary reason why economists believe that monopolies result in economic inefficiency. 
C)  false; the monopolist is a price taker. 
D)  true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices. 
A)  false; price increases will mean fewer sales, which may lower profits. 
B)  true; this is the primary reason why economists believe that monopolies result in economic inefficiency. 
C)  false; the monopolist is a price taker. 
D)  true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.

Question 8

For a monopolist, when the output effect is greater than the price effect, marginal revenue is

Accepted Answer

A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized. 
A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized.

Question 9

Microsoft's government­granted exclusive right to make and sell the Windows operating system is called a

Accepted Answer

The answer of Microsoft's government­granted exclusive right to make and...

Question 10

For a monopolist, marginal revenue is

Accepted Answer

A)  equal to price, as it is for a perfectly competitive firm. 
B)  less than price, as it is for a perfectly competitive firm. 
C)  equal to price, whereas marginal revenue is less than price for a perfectly competitive firm. 
D)  less than price, whereas marginal revenue is equal to price for a perfectly competitive firm. 
A)  equal to price, as it is for a perfectly competitive firm. 
B)  less than price, as it is for a perfectly competitive firm. 
C)  equal to price, whereas marginal revenue is less than price for a perfectly competitive firm. 
D)  less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.

Question 11

The legislation passed by Congress in 1914 to strengthen the government's powers and authorize private lawsuits was the

Accepted Answer

A)  Morgan Act. 
B)  Sherman Act. 
C)  Clayton Act. 
D)  14th Amendment. 
A)  Morgan Act. 
B)  Sherman Act. 
C)  Clayton Act. 
D)  14th Amendment.

Question 12

Figure 15-3  
-Refer to Figure 15-3. Which of the following statements is correct?

Accepted Answer

A)  Panel B represents the typical demand curve for a perfectly competitive firm. 
B)  Panel A represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive industry. 
D)  All of the above are correct. 
A)  Panel B represents the typical demand curve for a perfectly competitive firm. 
B)  Panel A represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive industry. 
D)  All of the above are correct.

Question 13

Figure 15-19  
-Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Accepted Answer

A)  $1. 
B)  $1,562.5. 
C)  $3,125. 
D)  $6,250. 
A)  $1. 
B)  $1,562.5. 
C)  $3,125. 
D)  $6,250.

Question 14

Most firms have

Accepted Answer

A)  no monopoly pricing power. 
B)  some monopoly pricing power. 
C)  absolute monopoly pricing power. 
D)  the ability to earn monopoly profits. 
A)  no monopoly pricing power. 
B)  some monopoly pricing power. 
C)  absolute monopoly pricing power. 
D)  the ability to earn monopoly profits.

Question 15

For a firm to price discriminate,

Accepted Answer

A)  it must be a natural monopoly. 
B)  it must be regulated by the government. 
C)  it must have some market power. 
D)  consumers must tell the firm what they are willing to pay for the product. 
A)  it must be a natural monopoly. 
B)  it must be regulated by the government. 
C)  it must have some market power. 
D)  consumers must tell the firm what they are willing to pay for the product.

Question 16

A monopoly creates a deadweight loss to society because it earns both short-run and long-run positive economic profits.

Accepted Answer

A) True 
 B)False

Question 17

Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginal cost.

Accepted Answer

A) True 
 B)False

Question 18

Table 15-22
  
-Refer to Table 15-22. The average revenue of the 50th unit of output is

Accepted Answer

The answer of Table 15-22
  
-Refer to Table 15-22....

Question 19

The laws governing patents and copyrights

Accepted Answer

A)  promote monopolies. 
B)  are intended to serve private interests, not the public's interest. 
C)  have costs but not benefits. 
D)  eliminate the need for firms to engage in research and development. 
A)  promote monopolies. 
B)  are intended to serve private interests, not the public's interest. 
C)  have costs but not benefits. 
D)  eliminate the need for firms to engage in research and development.

Question 20

Table 15-22
  
-Refer to Table 15-22. The marginal revenue becomes negative with the production of which unit of output?

Accepted Answer

The answer of Table 15-22
  
-Refer to Table 15-22....

Exam 14: Monopoly

A firm cannot price discriminate if it

Figure 15-19 -Refer to Figure 15-19. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Table 15-1 -Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity of output Q) will it produce and what price P) will it charge?

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

For a monopolist, when the output effect is greater than the price effect, marginal revenue is

Microsoft's government­granted exclusive right to make and sell the Windows operating system is called a

For a monopolist, marginal revenue is

The legislation passed by Congress in 1914 to strengthen the government's powers and authorize private lawsuits was the

Figure 15-3 -Refer to Figure 15-3. Which of the following statements is correct?

Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Most firms have

For a firm to price discriminate,

A monopoly creates a deadweight loss to society because it earns both short-run and long-run positive economic profits.

Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginal cost.

Table 15-22 -Refer to Table 15-22. The average revenue of the 50th unit of output is

The laws governing patents and copyrights

Table 15-22 -Refer to Table 15-22. The marginal revenue becomes negative with the production of which unit of output?

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

Microsoft's governmentgranted exclusive right to make and sell the Windows operating system is called a