Question 1

Compared to setting a single price,if a firm can price discriminate it

Accepted Answer

A) makes a larger economic profit. 
B) makes a lower economic profit. 
C) makes zero economic profit. 
D) has no change in its economic profit from when it set a single price. 
E) might increase,decrease,or not change its economic profit depending on whether as a single-price monopoly its marginal revenue curve was above,below,or the same as its demand curve. 
A) makes a larger economic profit. 
B) makes a lower economic profit. 
C) makes zero economic profit. 
D) has no change in its economic profit from when it set a single price. 
E) might increase,decrease,or not change its economic profit depending on whether as a single-price monopoly its marginal revenue curve was above,below,or the same as its demand curve.

Question 2

A monopoly,unlike a perfect competitor,has total control in its market because it is the single producer.Why,then,must a single-price monopoly decrease its price if it wants to increase its output?

Accepted Answer

Because the monopoly does control the ma

Question 3

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Accepted Answer

A) both markets are equally efficient in their use of resources. 
B) the monopoly market always is more efficient in the use of resources. 
C) the perfectly competitive market achieves efficiency in resource use while the monopoly market does not. 
D) the monopoly market achieves efficiency in resource use while perfectly competitive market does not. 
E) None of the above answers is correct because comparing a perfectly competitive market to a monopoly is impossible. 
A) both markets are equally efficient in their use of resources. 
B) the monopoly market always is more efficient in the use of resources. 
C) the perfectly competitive market achieves efficiency in resource use while the monopoly market does not. 
D) the monopoly market achieves efficiency in resource use while perfectly competitive market does not. 
E) None of the above answers is correct because comparing a perfectly competitive market to a monopoly is impossible.

Question 4

Which of the following would create a natural monopoly?

Accepted Answer

A) ownership of all the available units of a necessary input 
B) an exclusive right granted to supply a good or service 
C) requirement of a government license before the firm can sell the good or service 
D) technology enabling a single firm to produce at a lower average total cost than two or more firms 
E) a patent granted the producer of the good or service 
A) ownership of all the available units of a necessary input 
B) an exclusive right granted to supply a good or service 
C) requirement of a government license before the firm can sell the good or service 
D) technology enabling a single firm to produce at a lower average total cost than two or more firms 
E) a patent granted the producer of the good or service

Question 5

Once a monopoly has determined how much it produces,it will charge a price that

Accepted Answer

A) is determined by the intersection of the marginal cost and average total cost curves. 
B) minimizes marginal cost. 
C) is determined by its demand curve. 
D) is independent of the amount produced. 
E) is equal to its average total cost. 
A) is determined by the intersection of the marginal cost and average total cost curves. 
B) minimizes marginal cost. 
C) is determined by its demand curve. 
D) is independent of the amount produced. 
E) is equal to its average total cost.

Question 6

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,his total economic profit is

Accepted Answer

A) $60. 
B) $405. 
C) $0. 
D) $210,000. 
E) unknown because more information is needed to determine Paul's profit. 
A) $60. 
B) $405. 
C) $0. 
D) $210,000. 
E) unknown because more information is needed to determine Paul's profit.

Question 7

Which of the following goods is the best example of a natural monopoly?

Accepted Answer

A) distribution of electricity 
B) diamonds 
C) first-class mail 
D) a patented good 
E) blouses 
A) distribution of electricity 
B) diamonds 
C) first-class mail 
D) a patented good 
E) blouses

Question 8

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

Accepted Answer

A) patent 
B) copyright 
C) public franchise 
D) government license 
E) natural barrier 
A) patent 
B) copyright 
C) public franchise 
D) government license 
E) natural barrier

Question 9

The figure above shows a natural monopoly regulated using a marginal cost pricing rule.
-In the figure above,the length of the double sided arrow is the

Accepted Answer

A) consumer surplus. 
B) deadweight loss. 
C) producer surplus. 
D) economic loss per unit. 
E) economic profit. 
A) consumer surplus. 
B) deadweight loss. 
C) producer surplus. 
D) economic loss per unit. 
E) economic profit.

Question 10

A natural monopoly

Accepted Answer

A) sells to a single buyer. 
B) sets price equal to marginal revenue. 
C) is a firm than can supply the market at lower average total cost than two or more firms. 
D) produces a natural resource. 
E) faces a horizontal demand curve. 
A) sells to a single buyer. 
B) sets price equal to marginal revenue. 
C) is a firm than can supply the market at lower average total cost than two or more firms. 
D) produces a natural resource. 
E) faces a horizontal demand curve.

Question 11

-The above figure represents the cost,market demand,and marginal revenue curves for a monopoly.
a.Indicate the price and quantity a single-price monopoly selects by labeling the price Pm and the quantity Qm.
b.In the figure,lightly shade in the area that represents the single-price monopoly's economic profit.
c.Indicate the quantity a perfectly price-discriminating monopoly selects by labeling it Qppd.
d.In the figure,more darkly shade in the area that represents the additional economic profit the monopoly earns as a result of the perfect price discrimination.

Accepted Answer

@#IMG-DLM& a.The price is labeled Pm and the quant

Question 12

The social interest theory of regulation is that

Accepted Answer

A) regulators help producers maximize economic profit. 
B) regulation seeks to increase the government's revenue. 
C) regulation causes producers to produce at a point where they are earning normal profits. 
D) regulation seeks an efficient use of resources. 
E) regulation focuses on the consumers' interests and ignores producers' interests. 
A) regulators help producers maximize economic profit. 
B) regulation seeks to increase the government's revenue. 
C) regulation causes producers to produce at a point where they are earning normal profits. 
D) regulation seeks an efficient use of resources. 
E) regulation focuses on the consumers' interests and ignores producers' interests.

Question 13

A natural monopoly arises when

Accepted Answer

A) one firm controls the supply of a unique resource. 
B) a firm has many small firms that it can control. 
C) there are firms which act together as a monopoly. 
D) the long-run average cost curve slopes downward as it crosses the demand curve. 
E) one firm naturally convinces the government to limit competition in the market. 
A) one firm controls the supply of a unique resource. 
B) a firm has many small firms that it can control. 
C) there are firms which act together as a monopoly. 
D) the long-run average cost curve slopes downward as it crosses the demand curve. 
E) one firm naturally convinces the government to limit competition in the market.

Question 14

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

Accepted Answer

When total revenue is at its maximum,the

Question 15

The social interest theory of regulation assumes that

Accepted Answer

A) regulation is against the public interest. 
B) the public is indifferent to regulation. 
C) regulation seeks an efficient use of resources. 
D) the public cares deeply about regulation. 
E) regulators are captured by the firms being regulated. 
A) regulation is against the public interest. 
B) the public is indifferent to regulation. 
C) regulation seeks an efficient use of resources. 
D) the public cares deeply about regulation. 
E) regulators are captured by the firms being regulated.

Question 16

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

Accepted Answer

A) $6 and $1. 
B) $5 and $1. 
C) $3 and $1. 
D) $6 and $4. 
E) $4 and $3. 
A) $6 and $1. 
B) $5 and $1. 
C) $3 and $1. 
D) $6 and $4. 
E) $4 and $3.

Question 17

What are the conditions that define a monopoly?

Accepted Answer

There is only one firm produci

Question 18

A natural monopoly exists when

Accepted Answer

A) diseconomies of scale exist in an industry. 
B) one firm can supply an entire market at a lower average total cost than can two or more firms. 
C) a firm can engage in price discrimination. 
D) the producers in an industry have formed a cartel. 
E) a monopoly firm faces a horizontal demand curve. 
A) diseconomies of scale exist in an industry. 
B) one firm can supply an entire market at a lower average total cost than can two or more firms. 
C) a firm can engage in price discrimination. 
D) the producers in an industry have formed a cartel. 
E) a monopoly firm faces a horizontal demand curve.

Question 19

Why do some utilities have an incentive to exaggerate their costs of production?

Accepted Answer

Because utilities are generally allowed

Question 20

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3,the profit maximizing output for the monopoly will be between

Accepted Answer

A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units. 
A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units.

Compared to setting a single price,if a firm can price discriminate it

A monopoly,unlike a perfect competitor,has total control in its market because it is the single producer.Why,then,must a single-price monopoly decrease its price if it wants to increase its output?

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Which of the following would create a natural monopoly?

Once a monopoly has determined how much it produces,it will charge a price that

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,his total economic profit is

Which of the following goods is the best example of a natural monopoly?

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above,the length of the double sided arrow is the

A natural monopoly

The social interest theory of regulation is that

A natural monopoly arises when

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

The social interest theory of regulation assumes that

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

What are the conditions that define a monopoly?

A natural monopoly exists when

Why do some utilities have an incentive to exaggerate their costs of production?

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3,the profit maximizing output for the monopoly will be between

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 12: Monopoly

Compared to setting a single price,if a firm can price discriminate it

A monopoly,unlike a perfect competitor,has total control in its market because it is the single producer.Why,then,must a single-price monopoly decrease its price if it wants to increase its output?

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Which of the following would create a natural monopoly?

Once a monopoly has determined how much it produces,it will charge a price that

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a single-price monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,his total economic profit is

Which of the following goods is the best example of a natural monopoly?

Which barrier to entry is an exclusive right granted to the author or composer of a literary,musical,dramatic or artistic work?

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above,the length of the double sided arrow is the

A natural monopoly

The social interest theory of regulation is that

A natural monopoly arises when

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

The social interest theory of regulation assumes that

-The above table gives the demand schedule for a monopoly.The demand is inelastic over the entire price range between

What are the conditions that define a monopoly?

A natural monopoly exists when

Why do some utilities have an incentive to exaggerate their costs of production?

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3,the profit maximizing output for the monopoly will be between

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters