Question 1

An industry that features many,relatively small,firms that produce close substitutes is called

Accepted Answer

A)  pure monopoly. 
B)  imperfect oligopoly. 
C)  monopolistic competition. 
D)  oligopoly. 
E)  competitive oligopoly. 
A)  pure monopoly. 
B)  imperfect oligopoly. 
C)  monopolistic competition. 
D)  oligopoly. 
E)  competitive oligopoly.

Question 2

-Refer to the graph above.A profit-maximizing monopolist would produce______ units per day.

Accepted Answer

A)  50 
B)  100 
C)  150 
D)  200 
E)  250 
A)  50 
B)  100 
C)  150 
D)  200 
E)  250

Question 3

Given the total cost function,TC = 100 + 7Q,fixed cost is

Accepted Answer

A)  $100. 
B)  $100/Q. 
C)  $7. 
D)  $7/Q. 
E)  $107. 
A)  $100. 
B)  $100/Q. 
C)  $7. 
D)  $7/Q. 
E)  $107.

Question 4

Suppose that a perfectly competitive firm and a monopolist are both charging $5 per unit for their respective outputs.One can infer that

Accepted Answer

A)  marginal revenue is $5 for both firms. 
B)  marginal revenue is $5 for the competitive firm and less than $5 for the monopolist. 
C)  marginal revenue is less than $5 for both firms. 
D)  the competitive firm is charging too much and the monopolist too little. 
E)  both firms are earning a profit. 
A)  marginal revenue is $5 for both firms. 
B)  marginal revenue is $5 for the competitive firm and less than $5 for the monopolist. 
C)  marginal revenue is less than $5 for both firms. 
D)  the competitive firm is charging too much and the monopolist too little. 
E)  both firms are earning a profit.

Question 5

The economic justification for disdaining monopoly,from a social point of view,is that the monopolist

Accepted Answer

A)  always earns excessive profit. 
B)  can charge any price he wants. 
C)  exploits the inelastic nature of demand. 
D)  produces less than the quantity which maximizes total economic surplus. 
E)  can treat his consumers with complete indifference. 
A)  always earns excessive profit. 
B)  can charge any price he wants. 
C)  exploits the inelastic nature of demand. 
D)  produces less than the quantity which maximizes total economic surplus. 
E)  can treat his consumers with complete indifference.

Question 6

-Refer to the graph above.The firm illustrated in the graph is a(n)

Accepted Answer

A)  oligopolist. 
B)  monopolistic competitor. 
C)  perfect competitor. 
D)  natural monopolist. 
E)  structure that is impossible to classify. 
A)  oligopolist. 
B)  monopolistic competitor. 
C)  perfect competitor. 
D)  natural monopolist. 
E)  structure that is impossible to classify.

Question 7

-Refer to the graph above.If this firm were forced to set price equal to marginal cost,it would likely produce

Accepted Answer

A)  no output. 
B)  300 units of output. 
C)  1000 units of output. 
D)  1600 units of output. 
E)  1800 units of output. 
A)  no output. 
B)  300 units of output. 
C)  1000 units of output. 
D)  1600 units of output. 
E)  1800 units of output.

Question 8

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is

Accepted Answer

A)  $25. 
B)  $50. 
C)  $156.25. 
D)  $168.75. 
E)  $174.50. 
A)  $25. 
B)  $50. 
C)  $156.25. 
D)  $168.75. 
E)  $174.50.

Question 9

Marginal revenue is

Accepted Answer

A)  total revenue divided by output. 
B)  the extra revenue that results from selling one extra unit. 
C)  always equal to price. 
D)  never equal to price. 
E)  always positive. 
A)  total revenue divided by output. 
B)  the extra revenue that results from selling one extra unit. 
C)  always equal to price. 
D)  never equal to price. 
E)  always positive.

Question 10

-Refer to the table above.Assuming the monopolist does not price-discriminate,then,at the point of profit maximization,the firm will collect total revenue of

Accepted Answer

A)  $17. 
B)  $25. 
C)  $28. 
D)  $32. 
E)  $33. 
A)  $17. 
B)  $25. 
C)  $28. 
D)  $32. 
E)  $33.

Question 11

-Refer to the table above.A perfectly price-discriminating monopolist would produce

Accepted Answer

A)  1 unit. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
E)  6 units. 
A)  1 unit. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
E)  6 units.

Question 12

Which of the following provides market power to a natural monopolist?

Accepted Answer

A)  Control of important inputs. 
B)  Patents. 
C)  Inelastic demand. 
D)  An exclusive licence. 
E)  Economies of scale. 
A)  Control of important inputs. 
B)  Patents. 
C)  Inelastic demand. 
D)  An exclusive licence. 
E)  Economies of scale.

Question 13

The justification for having a list price and offering a mail-in rebate coupon is to

Accepted Answer

A)  separate the market into the less price-sensitive and the more price-sensitive. 
B)  discourage all consumers from filling out the rebate form. 
C)  make the consumer wait six months for the 50-cent cheque. 
D)  appeal to those consumers who enjoy corresponding with large corporations. 
E)  appeal to those consumers who dislike corresponding with large corporations. 
A)  separate the market into the less price-sensitive and the more price-sensitive. 
B)  discourage all consumers from filling out the rebate form. 
C)  make the consumer wait six months for the 50-cent cheque. 
D)  appeal to those consumers who enjoy corresponding with large corporations. 
E)  appeal to those consumers who dislike corresponding with large corporations.

Question 14

Discounts extended to children and senior citizens by movie theatres are examples of

Accepted Answer

A)  perfect price discrimination. 
B)  uniform pricing. 
C)  discrimination. 
D)  imperfect price discrimination. 
E)  fair and reasonable pricing policies. 
A)  perfect price discrimination. 
B)  uniform pricing. 
C)  discrimination. 
D)  imperfect price discrimination. 
E)  fair and reasonable pricing policies.

Question 15

A private regulated monopolist that is allowed to charge a price equal to his explicit costs plus a normal rate of return is experiencing

Accepted Answer

A)  cost-minus regulation. 
B)  cost regulation. 
C)  economic profits. 
D)  cost-plus regulation. 
E)  economic regulation. 
A)  cost-minus regulation. 
B)  cost regulation. 
C)  economic profits. 
D)  cost-plus regulation. 
E)  economic regulation.

Question 16

Of the sources of market power,the most common and enduring is

Accepted Answer

A)  a patent. 
B)  a copyright. 
C)  exclusive ownership of an input. 
D)  a government franchise. 
E)  economies of scale. 
A)  a patent. 
B)  a copyright. 
C)  exclusive ownership of an input. 
D)  a government franchise. 
E)  economies of scale.

Question 17

-Refer to the graph above.If regulators wanted this firm to earn only a normal profit,they would set the price equal to

Accepted Answer

A)  $5.50. 
B)  $8.00. 
C)  $9.00. 
D)  $11.50. 
E)  either $5.50 or $11.50. 
A)  $5.50. 
B)  $8.00. 
C)  $9.00. 
D)  $11.50. 
E)  either $5.50 or $11.50.

Question 18

If a firm triples all its inputs and output triples as a result,then the firm

Accepted Answer

A)  is experiencing increasing returns to scale. 
B)  is experiencing economies of scale. 
C)  is experiencing constant returns to scale. 
D)  will have lower total costs. 
E)  will have lower average total costs. 
A)  is experiencing increasing returns to scale. 
B)  is experiencing economies of scale. 
C)  is experiencing constant returns to scale. 
D)  will have lower total costs. 
E)  will have lower average total costs.

Question 19

The profit-maximizing rule MR = MC applies to

Accepted Answer

A)  all firms. 
B)  monopolists only. 
C)  perfect competitors only. 
D)  monopolistic competitors only. 
E)  both pure monopolists and perfect competitors. 
A)  all firms. 
B)  monopolists only. 
C)  perfect competitors only. 
D)  monopolistic competitors only. 
E)  both pure monopolists and perfect competitors.

Question 20

-Refer to the graph above.Maximizing total economic surplus occurs at a price equal to _________ per unit and an output equal to _________ units.

Accepted Answer

A)  $5;7 
B)  $5;3.5 
C)  $19.30;7 
D)  $22.50;3.5 
E)  $33.50;3.5 
A)  $5;7 
B)  $5;3.5 
C)  $19.30;7 
D)  $22.50;3.5 
E)  $33.50;3.5

An industry that features many,relatively small,firms that produce close substitutes is called

-Refer to the graph above.A profit-maximizing monopolist would produce______ units per day.

Given the total cost function,TC = 100 + 7Q,fixed cost is

Suppose that a perfectly competitive firm and a monopolist are both charging $5 per unit for their respective outputs.One can infer that

The economic justification for disdaining monopoly,from a social point of view,is that the monopolist

-Refer to the graph above.The firm illustrated in the graph is a(n)

-Refer to the graph above.If this firm were forced to set price equal to marginal cost,it would likely produce

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is

Marginal revenue is

-Refer to the table above.Assuming the monopolist does not price-discriminate,then,at the point of profit maximization,the firm will collect total revenue of

-Refer to the table above.A perfectly price-discriminating monopolist would produce

Which of the following provides market power to a natural monopolist?

The justification for having a list price and offering a mail-in rebate coupon is to

Discounts extended to children and senior citizens by movie theatres are examples of

A private regulated monopolist that is allowed to charge a price equal to his explicit costs plus a normal rate of return is experiencing

Of the sources of market power,the most common and enduring is

-Refer to the graph above.If regulators wanted this firm to earn only a normal profit,they would set the price equal to

If a firm triples all its inputs and output triples as a result,then the firm

The profit-maximizing rule MR = MC applies to

-Refer to the graph above.Maximizing total economic surplus occurs at a price equal to _ per unit and an output equal to _ units.

Thinking Like an Economist

Comparative Advantage: the Basis for Exchange

Supply and Demand: an Introduction

Demand: the Benefit Side of the Market

Perfectly Competitive Supply: the Cost Side of the Market

Efficiency and Exchange

The Quest for Profit and the Invisible Hand

Thinking Strategically

Externalities and Property Rights

The Economics of Information

Labour Markets

The Economics of Public Policy

Public Goods and Taxation

Income Distribution

Filters

Exam 8: Monopoly and Other Forms of Imperfect Competition

An industry that features many,relatively small,firms that produce close substitutes is called

-Refer to the graph above.A profit-maximizing monopolist would produce______ units per day.

Given the total cost function,TC = 100 + 7Q,fixed cost is

Suppose that a perfectly competitive firm and a monopolist are both charging $5 per unit for their respective outputs.One can infer that

The economic justification for disdaining monopoly,from a social point of view,is that the monopolist

-Refer to the graph above.The firm illustrated in the graph is a(n)

-Refer to the graph above.If this firm were forced to set price equal to marginal cost,it would likely produce

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is

Marginal revenue is

-Refer to the table above.Assuming the monopolist does not price-discriminate,then,at the point of profit maximization,the firm will collect total revenue of

-Refer to the table above.A perfectly price-discriminating monopolist would produce

Which of the following provides market power to a natural monopolist?

The justification for having a list price and offering a mail-in rebate coupon is to

Discounts extended to children and senior citizens by movie theatres are examples of

A private regulated monopolist that is allowed to charge a price equal to his explicit costs plus a normal rate of return is experiencing

Of the sources of market power,the most common and enduring is

-Refer to the graph above.If regulators wanted this firm to earn only a normal profit,they would set the price equal to

If a firm triples all its inputs and output triples as a result,then the firm

The profit-maximizing rule MR = MC applies to

-Refer to the graph above.Maximizing total economic surplus occurs at a price equal to _________ per unit and an output equal to _________ units.

Thinking Like an Economist

Comparative Advantage: the Basis for Exchange

Supply and Demand: an Introduction

Demand: the Benefit Side of the Market

Perfectly Competitive Supply: the Cost Side of the Market

Efficiency and Exchange

The Quest for Profit and the Invisible Hand

Thinking Strategically

Externalities and Property Rights

The Economics of Information

Labour Markets

The Economics of Public Policy

Public Goods and Taxation

Income Distribution

Filters

-Refer to the graph above.Maximizing total economic surplus occurs at a price equal to _ per unit and an output equal to _ units.