Question 1

Refer to the accompanying figure to answer the following questions.  
-The profit-maximizing price and quantity are ________,respectively.

Accepted Answer

A)  $34 and 20 
B)  $26 and 20 
C)  $18 and 20 
D)  $18 and 30 
E)  $13 and 20 
A)  $34 and 20 
B)  $26 and 20 
C)  $18 and 20 
D)  $18 and 30 
E)  $13 and 20

Question 2

The point of the 1890 Sherman Act was to

Accepted Answer

A)  nationalize industries where economies of scale were especially important. 
B)  prevent monopoly practices and promote commercial competition. 
C)  make rent seeking through lobbying of public officials illegal. 
D)  forbid states from imposing import tariffs on other states. 
E)  establish patents and copyrights as ways to protect creative activity. 
A)  nationalize industries where economies of scale were especially important. 
B)  prevent monopoly practices and promote commercial competition. 
C)  make rent seeking through lobbying of public officials illegal. 
D)  forbid states from imposing import tariffs on other states. 
E)  establish patents and copyrights as ways to protect creative activity.

Question 3

Which of the following can fall below the x axis when graphing price and cost against quantity?

Accepted Answer

A)  demand curve 
B)  marginal cost curve 
C)  total cost curve 
D)  fixed cost curve 
E)  marginal revenue curve 
A)  demand curve 
B)  marginal cost curve 
C)  total cost curve 
D)  fixed cost curve 
E)  marginal revenue curve

Question 4

Answer the following questions based on the accompanying graph.
   
a.What is the profit-maximizing price and quantity?
b.At the profit-maximizing price and quantity,what are the total profits or losses made by this firm?
c.At the profit-maximizing price and quantity,what is the approximate deadweight loss incurred by society?

Accepted Answer

a.The profit-maximizing price and quanti

Question 5

Draw graphs of a normal monopoly and a natural monopoly and discuss their differences.

Accepted Answer

@#IMG-DLM& A natural monopoly is different from a

Question 6

Refer to the accompanying table, which represents the costs and production for a monopolist, to answer the following questions.  
-The profit-maximizing quantity for this firm is

Accepted Answer

A)  zero. 
B)  one. 
C)  three. 
D)  four. 
E)  five. 
A)  zero. 
B)  one. 
C)  three. 
D)  four. 
E)  five.

Question 7

Refer to the accompanying figure to answer the following questions.  
-The revenue received by the profit-maximizing monopolist in this market is represented by

Accepted Answer

A)  A + B +C + D + F+ G + I + J. 
B)  B + D +G + E + H. 
C)  I + J. 
D)  C + D ++ G + I + J. 
E)  E + H. 
A)  A + B +C + D + F+ G + I + J. 
B)  B + D +G + E + H. 
C)  I + J. 
D)  C + D ++ G + I + J. 
E)  E + H.

Question 8

Using a graph,explain the concepts of the price effect and output effect.

Accepted Answer

@#IMG-DLM& The price effect refers to how lower pr

Question 9

Refer to the accompanying figure to answer the following questions.  
-Consumer surplus associated with a profit-maximizing monopoly is equal to

Accepted Answer

A)  $900. 
B)  $600. 
C)  $300. 
D)  $100. 
E)  $450. 
A)  $900. 
B)  $600. 
C)  $300. 
D)  $100. 
E)  $450.

Question 10

Ash is the preferred wood to be used in the production of baseball bats.If a company was to buy the rights to harvesting the ash trees out of all the forests in North America,which of the following barriers of entry has this company created?

Accepted Answer

A)  control of resources 
B)  problems raising capital 
C)  economies of scale 
D)  licensing 
E)  patents and copyright law 
A)  control of resources 
B)  problems raising capital 
C)  economies of scale 
D)  licensing 
E)  patents and copyright law

Question 11

Refer to the accompanying figure to answer the following questions.  
-The consumer surplus that is transferred to the monopolist as a result of the monopolist taking over the market is

Accepted Answer

A)  $900. 
B)  $150. 
C)  $300. 
D)  $100. 
E)  $450. 
A)  $900. 
B)  $150. 
C)  $300. 
D)  $100. 
E)  $450.

Question 12

Refer to the accompanying figure to answer the following questions. 
For a firm in a competitive market, the demand curve is horizontal, as shown.  
-A monopolist's marginal revenue

Accepted Answer

A)  is constant with respect to the quantity produced. 
B)  increases with the quantity produced. 
C)  decreases with the quantity produced. 
D)  is unrelated to the quantity produced. 
E)  is inversely proportional to the quantity produced. 
A)  is constant with respect to the quantity produced. 
B)  increases with the quantity produced. 
C)  decreases with the quantity produced. 
D)  is unrelated to the quantity produced. 
E)  is inversely proportional to the quantity produced.

Question 13

One way the government could regulate a natural monopoly at the marginal cost level would be to

Accepted Answer

A)  allow the natural monopoly to produce at the profit-maximizing point. 
B)  tax the monopoly. 
C)  place a tariff on the monopoly. 
D)  give the monopoly a patent. 
E)  subsidize the monopoly. 
A)  allow the natural monopoly to produce at the profit-maximizing point. 
B)  tax the monopoly. 
C)  place a tariff on the monopoly. 
D)  give the monopoly a patent. 
E)  subsidize the monopoly.

Question 14

Economies of scale is an example of

Accepted Answer

A)  rent seeking. 
B)  consumer surplus. 
C)  a government-created barrier. 
D)  an externality. 
E)  a natural barrier. 
A)  rent seeking. 
B)  consumer surplus. 
C)  a government-created barrier. 
D)  an externality. 
E)  a natural barrier.

Question 15

Refer to the accompanying figure to answer the following questions.  
-The revenue received by the profit-maximizing monopolist is

Accepted Answer

A)  $900. 
B)  $150. 
C)  $300. 
D)  $100. 
E)  $450. 
A)  $900. 
B)  $150. 
C)  $300. 
D)  $100. 
E)  $450.

Question 16

Clarice's Campground is the only campground located in Abilene,Texas.Clarice's Campground's demand curve is

Accepted Answer

A)  perfectly elastic. 
B)  perfectly inelastic. 
C)  horizontal. 
D)  the market demand curve. 
E)  upward sloping. 
A)  perfectly elastic. 
B)  perfectly inelastic. 
C)  horizontal. 
D)  the market demand curve. 
E)  upward sloping.

Question 17

A big difference between a competitive firm and a monopolist is that a monopolist

Accepted Answer

A)  does not charge a price equal to marginal revenue. 
B)  does not set marginal revenue equal to marginal cost to maximize profits. 
C)  does not try to maximize profits. 
D)  can always make positive economic profits. 
E)  cannot set its price at the market price. 
A)  does not charge a price equal to marginal revenue. 
B)  does not set marginal revenue equal to marginal cost to maximize profits. 
C)  does not try to maximize profits. 
D)  can always make positive economic profits. 
E)  cannot set its price at the market price.

Question 18

Antitrust laws are designed to

Accepted Answer

A)  promote monopoly practices. 
B)  promote competition. 
C)  increase prices. 
D)  decrease output. 
E)  promote awareness of government programs. 
A)  promote monopoly practices. 
B)  promote competition. 
C)  increase prices. 
D)  decrease output. 
E)  promote awareness of government programs.

Question 19

Answer the following questions based on the accompanying graph.
   
a.What is the profit-maximizing price and quantity for this firm?
b.What is the price and quantity combination that creates the greatest economic welfare for society? At this price and quantity,is the firm making a profit or a loss?
c.What will the firm do if it is incurring a loss? What is the lowest price the government could force the firm to charge?

Accepted Answer

a.The profit-maximizing price and quanti

Question 20

When a competitive market is controlled by a monopolist,part of consumer surplus gets transferred to producer surplus.Show this area on a graph.

Accepted Answer

The answer of When a competitive market is controlled by...

Exam 10: Understanding Monopoly

Refer to the accompanying figure to answer the following questions. -The profit-maximizing price and quantity are ________,respectively.

The point of the 1890 Sherman Act was to

Which of the following can fall below the x axis when graphing price and cost against quantity?

Draw graphs of a normal monopoly and a natural monopoly and discuss their differences.

Refer to the accompanying table, which represents the costs and production for a monopolist, to answer the following questions. -The profit-maximizing quantity for this firm is

Refer to the accompanying figure to answer the following questions. -The revenue received by the profit-maximizing monopolist in this market is represented by

Using a graph,explain the concepts of the price effect and output effect.

Refer to the accompanying figure to answer the following questions. -Consumer surplus associated with a profit-maximizing monopoly is equal to

Ash is the preferred wood to be used in the production of baseball bats.If a company was to buy the rights to harvesting the ash trees out of all the forests in North America,which of the following barriers of entry has this company created?

Refer to the accompanying figure to answer the following questions. -The consumer surplus that is transferred to the monopolist as a result of the monopolist taking over the market is

Refer to the accompanying figure to answer the following questions. For a firm in a competitive market, the demand curve is horizontal, as shown. -A monopolist's marginal revenue

One way the government could regulate a natural monopoly at the marginal cost level would be to

Economies of scale is an example of

Refer to the accompanying figure to answer the following questions. -The revenue received by the profit-maximizing monopolist is

Clarice's Campground is the only campground located in Abilene,Texas.Clarice's Campground's demand curve is

A big difference between a competitive firm and a monopolist is that a monopolist

Antitrust laws are designed to

When a competitive market is controlled by a monopolist,part of consumer surplus gets transferred to producer surplus.Show this area on a graph.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings,interest Rates,and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

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