Question 1

We define a monopoly as a market with

Accepted Answer

A) one supplier and no barriers to entry. 
B) one supplier with barriers to entry. 
C) many suppliers with no barriers to entry. 
D) many suppliers with barriers to entry. 
E) a few suppliers and barriers to entry. 
A) one supplier and no barriers to entry. 
B) one supplier with barriers to entry. 
C) many suppliers with no barriers to entry. 
D) many suppliers with barriers to entry. 
E) a few suppliers and barriers to entry.

Question 2

For a single-price monopoly,

Accepted Answer

A) if marginal cost exceeds marginal revenue,profits will increase if output decreases. 
B) if marginal revenue exceeds marginal cost,profits will increase if output decreases. 
C) there are several different price and output combinations that maximize profit. 
D) marginal revenue will be greater than price if demand is elastic. 
E) marginal revenue will be greater than price if demand is inelastic. 
A) if marginal cost exceeds marginal revenue,profits will increase if output decreases. 
B) if marginal revenue exceeds marginal cost,profits will increase if output decreases. 
C) there are several different price and output combinations that maximize profit. 
D) marginal revenue will be greater than price if demand is elastic. 
E) marginal revenue will be greater than price if demand is inelastic.

Question 3

The deadweight loss with perfect price discrimination is

Accepted Answer

A) equal to the deadweight loss of a single-price monopoly. 
B) sometimes less than and sometimes more than the deadweight loss of a single-price monopoly. 
C) more than the deadweight loss of a single-price monopoly. 
D) zero. 
E) larger than the deadweight loss with perfect competition. 
A) equal to the deadweight loss of a single-price monopoly. 
B) sometimes less than and sometimes more than the deadweight loss of a single-price monopoly. 
C) more than the deadweight loss of a single-price monopoly. 
D) zero. 
E) larger than the deadweight loss with perfect competition.

Question 4

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

Accepted Answer

A) It is a horizontal line at the competitive industry's price. 
B) It is a vertical line at the formerly competitive industry's quantity. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is the formerly competitive industry's supply curve. 
E) It is the same as the formally competitive industry's average total cost curve. 
A) It is a horizontal line at the competitive industry's price. 
B) It is a vertical line at the formerly competitive industry's quantity. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is the formerly competitive industry's supply curve. 
E) It is the same as the formally competitive industry's average total cost curve.

Question 5

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

Accepted Answer

A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost. 
A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost.

Question 6

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.Compared to a marginal cost pricing rule,under an average cost pricing rule,TWC ________ output by ________ households.

Accepted Answer

A) increases;20,000 
B) decreases;10,000 
C) increases;30,000 
D) decreases;50,000 
E) decreases;40,000 
A) increases;20,000 
B) decreases;10,000 
C) increases;30,000 
D) decreases;50,000 
E) decreases;40,000

Question 7

-The above table gives the demand schedule for a single-price monopoly.The marginal revenue first becomes negative when going from

Accepted Answer

A) 1 unit to 2 units. 
B) 2 units to 3 units. 
C) 3 units to 4 units. 
D) 4 units to 5 units. 
E) None of the above;the total revenue is always positive so the marginal revenue must always be positive. 
A) 1 unit to 2 units. 
B) 2 units to 3 units. 
C) 3 units to 4 units. 
D) 4 units to 5 units. 
E) None of the above;the total revenue is always positive so the marginal revenue must always be positive.

Question 8

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC operated under an average cost pricing rule,how many households in Oakland are served?

Accepted Answer

A) 20,000 
B) 30,000 
C) 40,000 
D) 50,000 
E) None of the above answers is correct. 
A) 20,000 
B) 30,000 
C) 40,000 
D) 50,000 
E) None of the above answers is correct.

Question 9

A legal barrier is created when a firm

Accepted Answer

A) has economies of scale,which allow it to produce at a lower cost than two or more firms. 
B) is granted a public franchise,government license,patent,or copyright. 
C) produces a unique product or service. 
D) produces a standardized product or service. 
E) has an ownership barrier to entry. 
A) has economies of scale,which allow it to produce at a lower cost than two or more firms. 
B) is granted a public franchise,government license,patent,or copyright. 
C) produces a unique product or service. 
D) produces a standardized product or service. 
E) has an ownership barrier to entry.

Question 10

Define price discrimination.What factors must be present in order for a firm to price discriminate? Why do firms price discriminate?

Accepted Answer

Price discrimination is selling a good o

Question 11

What problem is caused by subsidizing a natural monopoly regulated using a marginal cost pricing rule?

Accepted Answer

A) The regulated firm ends up earning an economic profit. 
B) Consumers pay too much for the product of the monopoly. 
C) This policy is a two-part tariff,which creates inefficiency. 
D) The taxes required to gain the revenue used as the subsidy result in a deadweight loss that subtracts from gains in efficiency which result from use of the marginal cost pricing rule. 
E) The regulated firm goes out of business if it is subsidized. 
A) The regulated firm ends up earning an economic profit. 
B) Consumers pay too much for the product of the monopoly. 
C) This policy is a two-part tariff,which creates inefficiency. 
D) The taxes required to gain the revenue used as the subsidy result in a deadweight loss that subtracts from gains in efficiency which result from use of the marginal cost pricing rule. 
E) The regulated firm goes out of business if it is subsidized.

Question 12

Which of the following firms is most likely to be a monopoly?

Accepted Answer

A) local restaurant 
B) local distributor of natural gas 
C) local book store 
D) clothing store 
E) local bank 
A) local restaurant 
B) local distributor of natural gas 
C) local book store 
D) clothing store 
E) local bank

Question 13

Which of the following is correct for a single-price monopoly?
I.The firm can determine the quantity it produces and the price it charges.
Ii.It would never profitably produce output in the inelastic range of its demand.
Iii.Its marginal revenue is less than price.

Accepted Answer

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

Question 14

-In the above figure,for a single-price monopoly the consumer surplus is equal to the area

Accepted Answer

A) abP1. 
B) acP2. 
C) bce. 
D) bed. 
E) cQ20P2. 
A) abP1. 
B) acP2. 
C) bce. 
D) bed. 
E) cQ20P2.

Question 15

What is the social interest theory of regulation? How does it differ from the capture theory of regulation?

Accepted Answer

The social interest theory of regulation

Question 16

Patents

Accepted Answer

A) are a legal barrier to entry. 
B) remove legal barriers to entry. 
C) create economies of scale. 
D) decrease the incentive to innovate. 
E) are prohibited in the United States. 
A) are a legal barrier to entry. 
B) remove legal barriers to entry. 
C) create economies of scale. 
D) decrease the incentive to innovate. 
E) are prohibited in the United States.

Question 17

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The deadweight loss when the market has a monopoly producer is

Accepted Answer

A) ace. 
B) abf. 
C) bcd. 
D) bcef. 
E) acd. 
A) ace. 
B) abf. 
C) bcd. 
D) bcef. 
E) acd.

Question 18

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

Accepted Answer

Price discrimination helps businesses ca

Question 19

Describe the three general types of barriers.

Accepted Answer

Barriers to entry can be divided into le

Question 20

The capture theory of regulation assumes that regulation benefits

Accepted Answer

A) producers. 
B) consumers. 
C) government. 
D) the general public. 
E) the regulators. 
A) producers. 
B) consumers. 
C) government. 
D) the general public. 
E) the regulators.

We define a monopoly as a market with

For a single-price monopoly,

The deadweight loss with perfect price discrimination is

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

-The above table gives the demand schedule for a single-price monopoly.The marginal revenue first becomes negative when going from

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC operated under an average cost pricing rule,how many households in Oakland are served?

A legal barrier is created when a firm

Define price discrimination.What factors must be present in order for a firm to price discriminate? Why do firms price discriminate?

What problem is caused by subsidizing a natural monopoly regulated using a marginal cost pricing rule?

Which of the following firms is most likely to be a monopoly?

Which of the following is correct for a single-price monopoly? I.The firm can determine the quantity it produces and the price it charges. Ii.It would never profitably produce output in the inelastic range of its demand. Iii.Its marginal revenue is less than price.

-In the above figure,for a single-price monopoly the consumer surplus is equal to the area

What is the social interest theory of regulation? How does it differ from the capture theory of regulation?

Patents

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The deadweight loss when the market has a monopoly producer is

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

Describe the three general types of barriers.

The capture theory of regulation assumes that regulation benefits

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

We define a monopoly as a market with

For a single-price monopoly,

The deadweight loss with perfect price discrimination is

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

-The above table gives the demand schedule for a single-price monopoly.The marginal revenue first becomes negative when going from

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC operated under an average cost pricing rule,how many households in Oakland are served?

A legal barrier is created when a firm

Define price discrimination.What factors must be present in order for a firm to price discriminate? Why do firms price discriminate?

What problem is caused by subsidizing a natural monopoly regulated using a marginal cost pricing rule?

Which of the following firms is most likely to be a monopoly?

Which of the following is correct for a single-price monopoly? I.The firm can determine the quantity it produces and the price it charges. Ii.It would never profitably produce output in the inelastic range of its demand. Iii.Its marginal revenue is less than price.

-In the above figure,for a single-price monopoly the consumer surplus is equal to the area

What is the social interest theory of regulation? How does it differ from the capture theory of regulation?

Patents

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The deadweight loss when the market has a monopoly producer is

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

Describe the three general types of barriers.

The capture theory of regulation assumes that regulation benefits

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