Question 1

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

Accepted Answer

A)  $21 
B)  $20 
C)  $18 
D)  $6 
A)  $21 
B)  $20 
C)  $18 
D)  $6

Question 2

The figure above shows a natural monopoly.
-In the figure above,if the firm is regulated using an average cost pricing rule,the consumer surplus created is equal to the area of

Accepted Answer

A)  ABG. 
B)  BEFG. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no consumer surplus created. 
A)  ABG. 
B)  BEFG. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no consumer surplus created.

Question 3

A monopoly

Accepted Answer

A)  is not protected by barriers to entry. 
B)  produces a good with no close substitutes. 
C)  faces a downward-sloping demand curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  is not protected by barriers to entry. 
B)  produces a good with no close substitutes. 
C)  faces a downward-sloping demand curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 4

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 5

In States where the government runs liquor stores,the monopoly results from

Accepted Answer

A)  economies of scale. 
B)  legal restrictions. 
C)  control of an essential resource. 
D)  patents. 
E)  public fear. 
A)  economies of scale. 
B)  legal restrictions. 
C)  control of an essential resource. 
D)  patents. 
E)  public fear.

Question 6

Arnie's Airlines is a monopoly airline that is able to price discriminate.If Arnie's decides to price discriminate,then

Accepted Answer

A)  Arnie's profit decreases. 
B)  consumer surplus decreases. 
C)  Arnie's revenues decrease. 
D)  Arnie's sells fewer tickets. 
E)  Arnie's will see all of his tickets at a single price. 
A)  Arnie's profit decreases. 
B)  consumer surplus decreases. 
C)  Arnie's revenues decrease. 
D)  Arnie's sells fewer tickets. 
E)  Arnie's will see all of his tickets at a single price.

Question 7

-Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

Accepted Answer

The single-price monopoly crea

Question 8

-The above figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly.
a.What was the competitive price and quantity?
b.What is the monopoly price and quantity?
c.What area represents consumer surplus under perfect competition?
d.What area represents consumer surplus under monopoly?
e.What area represents the deadweight loss of monopoly?

Accepted Answer

a.The competitive price was P? and the c

Question 9

The figure above shows a natural monopoly.
-In the figure above,if the firm is regulated using an average cost pricing rule,the firm

Accepted Answer

A)  avoids an economic loss, but produces less than the efficient quantity and creates a deadweight loss. 
B)  incurs an economic loss, but produces the efficient quantity and creates a deadweight loss. 
C)  avoids an economic loss, is able to produce the efficient quantity, and therefore avoids creating a deadweight loss. 
D)  avoids an economic loss, produces the efficient quantity, and creates a deadweight loss. 
E)  incurs an economic loss, produces the efficient quantity, and avoids creating a deadweight loss. 
A)  avoids an economic loss, but produces less than the efficient quantity and creates a deadweight loss. 
B)  incurs an economic loss, but produces the efficient quantity and creates a deadweight loss. 
C)  avoids an economic loss, is able to produce the efficient quantity, and therefore avoids creating a deadweight loss. 
D)  avoids an economic loss, produces the efficient quantity, and creates a deadweight loss. 
E)  incurs an economic loss, produces the efficient quantity, and avoids creating a deadweight loss.

Question 10

In a monopoly,producers ________ and consumers ________.

Accepted Answer

A)  gain; lose 
B)  lose; lose 
C)  lose; gain 
D)  gain; gain 
E)  gain; do not gain or lose 
A)  gain; lose 
B)  lose; lose 
C)  lose; gain 
D)  gain; gain 
E)  gain; do not gain or lose

Question 11

If a monopoly wants to sell a larger quantity,it must

Accepted Answer

A)  set a higher price. 
B)  maintain the current price. 
C)  set a lower price. 
D)  implement new technology. 
E)  increase the barrier to entry that protects it. 
A)  set a higher price. 
B)  maintain the current price. 
C)  set a lower price. 
D)  implement new technology. 
E)  increase the barrier to entry that protects it.

Question 12

Describe the three general types of barriers.

Accepted Answer

Barriers to entry can be divided into le

Question 13

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

Accepted Answer

A)  a natural monopoly. 
B)  a marginal cost pricing rule. 
C)  an average cost pricing rule. 
D)  the capture theory of regulation. 
E)  the social interest theory of regulation. 
A)  a natural monopoly. 
B)  a marginal cost pricing rule. 
C)  an average cost pricing rule. 
D)  the capture theory of regulation. 
E)  the social interest theory of regulation.

Question 14

If a monopoly wants to sell a greater quantity of output,it must

Accepted Answer

A)  lower its price. 
B)  raise its price. 
C)  tell consumers to buy more because it's a monopolist. 
D)  raise its marginal cost. 
E)  change its fixed costs. 
A)  lower its price. 
B)  raise its price. 
C)  tell consumers to buy more because it's a monopolist. 
D)  raise its marginal cost. 
E)  change its fixed costs.

Question 15

When compared to a perfectly competitive market,a single-price monopoly with the same costs produces ________ output and charges ________ price.

Accepted Answer

A)  a larger; a lower 
B)  a smaller; a lower 
C)  the same; a higher 
D)  a smaller; a higher 
E)  a smaller; the same 
A)  a larger; a lower 
B)  a smaller; a lower 
C)  the same; a higher 
D)  a smaller; a higher 
E)  a smaller; the same

Question 16

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect.If

Question 17

A single-price monopoly has marginal cost of $23 and marginal revenue of $28.Which of the following is definitely correct?

Accepted Answer

A)  It is maximizing profit. 
B)  To increase profit, it should produce less. 
C)  To increase profit, it should produce more. 
D)  It should shut down. 
E)  It is making an economic profit. 
A)  It is maximizing profit. 
B)  To increase profit, it should produce less. 
C)  To increase profit, it should produce more. 
D)  It should shut down. 
E)  It is making an economic profit.

Question 18

When a natural monopoly is regulated using an average cost pricing rule,what can you say about the firm's profit and the market's efficiency?

Accepted Answer

Using an average cost pricing rule,the m

Question 19

A profit-maximizing output for a single-price monopoly is determined by the intersection of the ________ curves and the profit-maximizing price is found on the ________ curve.

Accepted Answer

A)  marginal cost and marginal revenue; marginal revenue 
B)  marginal cost and marginal revenue; demand 
C)  total revenue and total cost; total revenue 
D)  marginal cost and average total cost; demand 
E)  demand and supply; supply 
A)  marginal cost and marginal revenue; marginal revenue 
B)  marginal cost and marginal revenue; demand 
C)  total revenue and total cost; total revenue 
D)  marginal cost and average total cost; demand 
E)  demand and supply; supply

Question 20

-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

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using an average cost pricing rule,the consumer surplus created is equal to the area of

A monopoly

A legal barrier is created when a firm

In States where the government runs liquor stores,the monopoly results from

Arnie's Airlines is a monopoly airline that is able to price discriminate.If Arnie's decides to price discriminate,then

-Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using an average cost pricing rule,the firm

In a monopoly,producers and consumers .

If a monopoly wants to sell a larger quantity,it must

Describe the three general types of barriers.

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

If a monopoly wants to sell a greater quantity of output,it must

When compared to a perfectly competitive market,a single-price monopoly with the same costs produces output and charges price.

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

A single-price monopoly has marginal cost of $23 and marginal revenue of $28.Which of the following is definitely correct?

When a natural monopoly is regulated using an average cost pricing rule,what can you say about the firm's profit and the market's efficiency?

A profit-maximizing output for a single-price monopoly is determined by the intersection of the curves and the profit-maximizing price is found on the curve.

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

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Monopoly

-The table above gives the demand for a monopolist's output.What is the total revenue in when 3 units of output are produced?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using an average cost pricing rule,the consumer surplus created is equal to the area of

A monopoly

A legal barrier is created when a firm

In States where the government runs liquor stores,the monopoly results from

Arnie's Airlines is a monopoly airline that is able to price discriminate.If Arnie's decides to price discriminate,then

-Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using an average cost pricing rule,the firm

In a monopoly,producers ________ and consumers ________.

If a monopoly wants to sell a larger quantity,it must

Describe the three general types of barriers.

Suppose that a regulatory agency helps producers maximize economic profit.This type of regulation coincides with

If a monopoly wants to sell a greater quantity of output,it must

When compared to a perfectly competitive market,a single-price monopoly with the same costs produces ________ output and charges ________ price.

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

A single-price monopoly has marginal cost of $23 and marginal revenue of $28.Which of the following is definitely correct?

When a natural monopoly is regulated using an average cost pricing rule,what can you say about the firm's profit and the market's efficiency?

A profit-maximizing output for a single-price monopoly is determined by the intersection of the ________ curves and the profit-maximizing price is found on the ________ curve.

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

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

In a monopoly,producers and consumers .

When compared to a perfectly competitive market,a single-price monopoly with the same costs produces output and charges price.

A profit-maximizing output for a single-price monopoly is determined by the intersection of the curves and the profit-maximizing price is found on the curve.