Question 1

In the diagram below,which area represents the deadweight loss from monopoly?

Accepted Answer

A) E 
B) H 
C) C+D+E 
D) E+H 
A) E 
B) H 
C) C+D+E 
D) E+H D

Question 2

Figure 15-7
The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist.
  
-Refer to Figure 15-7.If the monopoly firm is NOT allowed to price discriminate,then the deadweight loss amounts to

Accepted Answer

A) $50. 
B) $100. 
C) $500. 
D) $1,000. 
A) $50. 
B) $100. 
C) $500. 
D) $1,000. D

Question 3

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Accepted Answer

The private monopolist is governed by the market.Even though the market solution is sub-optimal,it may be better than outcomes generated by publicly owned monopolies.Publicly owned monopolies may restrict output to levels below the private market outcome and thus generate an even lower level of social surplus than a private profit-maximizing monopolist.They also may not work to reduce costs.

Question 4

For a profit-maximizing monopolist,

Accepted Answer

A) P > MR = MC. B) P = MR = MC. C) P > MR > MC. D) MR < MC < P. A) P > MR = MC. B) P = MR = MC. C) P > MR > MC. D) MR < MC < P.

Question 5

A profit-maximizing monopolist will produce the level of output at which

Accepted Answer

A) average revenue is equal to average total cost. 
B) average revenue is equal to marginal cost. 
C) marginal revenue is equal to marginal cost. 
D) total revenue is equal to opportunity cost. 
A) average revenue is equal to average total cost. 
B) average revenue is equal to marginal cost. 
C) marginal revenue is equal to marginal cost. 
D) total revenue is equal to opportunity cost.

Question 6

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Accepted Answer

A) price is higher than the socially-optimal price. 
B) price equals marginal revenue. 
C) price is the same as average revenue. 
D) maximizes profit where marginal revenue equals marginal cost. 
A) price is higher than the socially-optimal price. 
B) price equals marginal revenue. 
C) price is the same as average revenue. 
D) maximizes profit where marginal revenue equals marginal cost.

Question 7

For a monopolist,when does marginal revenue exceed average revenue?

Accepted Answer

A) Never 
B) When output is less than the profit-maximizing level of output 
C) When output is greater than the profit-maximizing level of output 
D) For all levels of output greater than zero. 
A) Never 
B) When output is less than the profit-maximizing level of output 
C) When output is greater than the profit-maximizing level of output 
D) For all levels of output greater than zero.

Question 8

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the

Accepted Answer

A) Morgan Act. 
B) Sherman Act. 
C) Clayton Act. 
D) 14th Amendment. 
A) Morgan Act. 
B) Sherman Act. 
C) Clayton Act. 
D) 14th Amendment.

Question 9

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A) P₃ × Q₂. 
B) P₂ × Q₄. 
C) (P₃ - P₀) × Q₂. 
D) (P₃ - P₀) × Q₄. 
A) P₃ × Q₂. 
B) P₂ × Q₄. 
C) (P₃ - P₀) × Q₂. 
D) (P₃ - P₀) × Q₄.

Question 10

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-2.The demand curve for a monopoly firm is depicted by curve

Accepted Answer

A) a. 
B) B. 
C) C. 
D) D. 
A) a. 
B) B. 
C) C. 
D) D.

Question 11

What do economists call the business practice of selling the same good at difference prices to different customers?

Accepted Answer

A) Price discrimination 
B) Collusion 
C) Compensating differential 
D) Both a and b are correct 
A) Price discrimination 
B) Collusion 
C) Compensating differential 
D) Both a and b are correct

Question 12

The problem with monopolies is their ability (i)	to do away with barriers to entry.
(ii)	to price their product at a level that exceeds marginal cost.
(iii)	to restrict output below the socially efficient level of production.

Accepted Answer

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

Question 13

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.

Accepted Answer

A) $60 
B) $70 
C) $100 
D) $120 
A) $60 
B) $70 
C) $100 
D) $120

Question 14

Monopoly firms have

Accepted Answer

A) downward-sloping demand curves and they can sell as much output as they desire at the market price. 
B) downward-sloping demand curves and they can sell only a limited quantity of output at each price. 
C) horizontal demand curves and they can sell as much output as they desire at the market price. 
D) horizontal demand curves and they can sell only a limited quantity of output at each price. 
A) downward-sloping demand curves and they can sell as much output as they desire at the market price. 
B) downward-sloping demand curves and they can sell only a limited quantity of output at each price. 
C) horizontal demand curves and they can sell as much output as they desire at the market price. 
D) horizontal demand curves and they can sell only a limited quantity of output at each price.

Question 15

When a firm's average total cost curve continually declines,the firm is a

Accepted Answer

A) government-created monopoly. 
B) natural monopoly. 
C) revenue monopoly. 
D) All of the above are correct. 
A) government-created monopoly. 
B) natural monopoly. 
C) revenue monopoly. 
D) All of the above are correct.

Question 16

The collection of statutes aimed at curbing monopoly power is called

Accepted Answer

A) the 14th amendment. 
B) the Clayton Act. 
C) the Sherman Act. 
D) antitrust law. 
A) the 14th amendment. 
B) the Clayton Act. 
C) the Sherman Act. 
D) antitrust law.

Question 17

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A) quantity supplied. 
B) supply price. 
C) producer gain. 
D) producer surplus. 
A) quantity supplied. 
B) supply price. 
C) producer gain. 
D) producer surplus.

Question 18

Angelo is a wholesale meatball distributor.He sells his meatballs to all the finest Italian restaurants in town.Nobody can make meatballs like Angelo.As a result,his is the only business in town that sells meatballs to restaurants.Assuming that Angelo is maximizing his profit,which of the following statements is true?

Accepted Answer

A) Meatball prices will be less than marginal cost. 
B) Meatball prices will equal marginal cost. 
C) Meatball prices will exceed marginal cost. 
D) Meatball prices will be a function of supply and demand and will therefore oscillate around marginal costs. 
A) Meatball prices will be less than marginal cost. 
B) Meatball prices will equal marginal cost. 
C) Meatball prices will exceed marginal cost. 
D) Meatball prices will be a function of supply and demand and will therefore oscillate around marginal costs.

Question 19

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
  
-Refer to Figure 15-3.At the profit-maximizing level of output,

Accepted Answer

A) marginal revenue is equal to P₃. 
B) marginal cost is equal to P₃. 
C) average revenue is equal to P₃. 
D) average total cost is equal to P₁. 
A) marginal revenue is equal to P₃. 
B) marginal cost is equal to P₃. 
C) average revenue is equal to P₃. 
D) average total cost is equal to P₁.

Question 20

When a single firm can supply a product to an entire market at a smaller cost than could two or more firms,the industry is called a

Accepted Answer

A) resource industry. 
B) exclusive industry. 
C) government monopoly. 
D) natural monopoly. 
A) resource industry. 
B) exclusive industry. 
C) government monopoly. 
D) natural monopoly.

Exam 15: Monopoly

In the diagram below,which area represents the deadweight loss from monopoly?

Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. -Refer to Figure 15-7.If the monopoly firm is NOT allowed to price discriminate,then the deadweight loss amounts to

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

For a profit-maximizing monopolist,

A profit-maximizing monopolist will produce the level of output at which

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

For a monopolist,when does marginal revenue exceed average revenue?

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Figure 15-2 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.The demand curve for a monopoly firm is depicted by curve

What do economists call the business practice of selling the same good at difference prices to different customers?

The problem with monopolies is their ability (i) to do away with barriers to entry. (ii) to price their product at a level that exceeds marginal cost. (iii) to restrict output below the socially efficient level of production.

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.

Monopoly firms have

When a firm's average total cost curve continually declines,the firm is a

The collection of statutes aimed at curbing monopoly power is called

The amount that producers receive for a good minus their costs of producing it equals

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.At the profit-maximizing level of output,

When a single firm can supply a product to an entire market at a smaller cost than could two or more firms,the industry is called a

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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