Question 1

One way the government can restore competitiveness in a market is through

Accepted Answer

A)  patents. 
B)  copyrights. 
C)  tariffs. 
D)  taxes. 
E)  antitrust laws. 
A)  patents. 
B)  copyrights. 
C)  tariffs. 
D)  taxes. 
E)  antitrust laws.

Question 2

Answer the following questions based on the accompanying graph. 
   
a.What area(s)of the graph represent(s)total revenue for this firm if it was profit maximizing?
b.What area(s)of the graph represent(s)total cost for this firm if it was profit maximizing?
c.What area(s)of the graph represent(s)profits for this firm if it was profit maximizing?
d.What area(s)of the graph represent(s)deadweight loss if the firm was profit maximizing?

Accepted Answer

a.The area that represents total revenue

Question 3

Explain the price effect and the output effect as it pertains to the marginal revenue of a monopolist.

Accepted Answer

The price effect refers to how lower pri

Question 4

Refer to the accompanying figure to answer the following questions.
For a firm in a competitive market,the demand curve is horizontal,as shown.
  
-What will happen if the firm offers its product at a price slightly above price PC?

Accepted Answer

A)  The marginal revenue will drop below zero. 
B)  The firm will slightly increase its profits. 
C)  The sales volume will plummet to essentially zero. 
D)  The firm will run into high barriers to exit from the market. 
E)  The number of units sold will slightly increase. 
A)  The marginal revenue will drop below zero. 
B)  The firm will slightly increase its profits. 
C)  The sales volume will plummet to essentially zero. 
D)  The firm will run into high barriers to exit from the market. 
E)  The number of units sold will slightly increase.

Question 5

The ________ cost pricing rule means that the government can regulate a natural monopoly to minimize deadweight loss without forcing the private firm out of the market.

Accepted Answer

A)  marginal 
B)  average 
C)  total 
D)  fixed 
E)  variable 
A)  marginal 
B)  average 
C)  total 
D)  fixed 
E)  variable

Question 6

A natural monopoly

Accepted Answer

A)  exists when many sellers experience lower average total costs than potential competitors do. 
B)  exists when a firm has sole ownership of a natural resource. 
C)  is an example of a government-created barrier. 
D)  is needed to make a profit in the long run. 
E)  exists when a single seller experiences lower average total costs than any potential competitor. 
A)  exists when many sellers experience lower average total costs than potential competitors do. 
B)  exists when a firm has sole ownership of a natural resource. 
C)  is an example of a government-created barrier. 
D)  is needed to make a profit in the long run. 
E)  exists when a single seller experiences lower average total costs than any potential competitor.

Question 7

The monopolist's preferred production level,for maximum profit,is determined by the intersection of which two curves?

Accepted Answer

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

Question 8

The profit-maximizing rule for a monopolist is

Accepted Answer

A)  marginal revenue = marginal cost. 
B)  price = marginal cost. 
C)  price = marginal revenue. 
D)  average total cost = marginal revenue. 
E)  average total cost =  marginal cost. 
A)  marginal revenue = marginal cost. 
B)  price = marginal cost. 
C)  price = marginal revenue. 
D)  average total cost = marginal revenue. 
E)  average total cost =  marginal cost.

Question 9

Refer to the accompanying figure to answer the following questions.
  
-When a competitive market comes under the control of a monopoly,the quantity changes from

Accepted Answer

A)  D to E 
B)  E to D 
C)  C to A 
D)  B to A 
E)  A to B 
A)  D to E 
B)  E to D 
C)  C to A 
D)  B to A 
E)  A to B

Question 10

Patents and copyrights can

Accepted Answer

A)  create strong incentives to develop new medicines. 
B)  provide heavy competition in markets. 
C)  never lead to deadweight loss. 
D)  assure firms that their products will make a profit. 
E)  be considered natural barriers. 
A)  create strong incentives to develop new medicines. 
B)  provide heavy competition in markets. 
C)  never lead to deadweight loss. 
D)  assure firms that their products will make a profit. 
E)  be considered natural barriers.

Question 11

Refer to the accompanying figure to answer the following questions.
  
-Which of the following is the profit-maximizing price and quantity combination?

Accepted Answer

A)  A and E 
B)  B and F 
C)  C and G 
D)  D and H 
E)  A and H 
A)  A and E 
B)  B and F 
C)  C and G 
D)  D and H 
E)  A and H

Question 12

When marginal revenue is positive,the

Accepted Answer

A)  lost revenues associated with the price effect outweigh the revenue gains created by the output effect. 
B)  lost revenues associated with the price effect are outweighed by the revenue gains created by the output effect. 
C)  output effect is relatively small compared to the price effect. 
D)  firm is maximizing revenues. 
E)  firm cannot be maximizing profits. 
A)  lost revenues associated with the price effect outweigh the revenue gains created by the output effect. 
B)  lost revenues associated with the price effect are outweighed by the revenue gains created by the output effect. 
C)  output effect is relatively small compared to the price effect. 
D)  firm is maximizing revenues. 
E)  firm cannot be maximizing profits.

Question 13

Some economists argue that a government-created monopoly in the medical field can be good for the overall growth of an economy,even though it does create deadweight loss.Support this argument.

Accepted Answer

A government-created monopoly gives mono

Question 14

Refer to the accompanying table,which represents the costs and production for a monopolist,to answer the following questions.
  
-When a monopolist lowers a price from $80 to $70,the quantity that the firm is able to sell increases from 100 to 150.The change in revenue associated with the price effect is equal to

Accepted Answer

A)  $3,500. 
B)  -$3,500. 
C)  $1,000. 
D)  -$1,000. 
E)  $4,000. 
A)  $3,500. 
B)  -$3,500. 
C)  $1,000. 
D)  -$1,000. 
E)  $4,000.

Question 15

The price effect refers to how

Accepted Answer

A)  lower prices affect the quantity sold. 
B)  firms can set their prices. 
C)  firms choose their quantities. 
D)  lower prices affect revenue. 
E)  lower output affects the price. 
A)  lower prices affect the quantity sold. 
B)  firms can set their prices. 
C)  firms choose their quantities. 
D)  lower prices affect revenue. 
E)  lower output affects the price.

Question 16

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

Accepted Answer

@#IMG-DLM& In a competitive market,the quantity pr

Question 17

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Accepted Answer

A)  the city instituted price caps as part of an effort to regulate the monopoly. 
B)  New Yorkers have turned to walking and bicycling as ways to get around. 
C)  ridesharing services like Uber have made the medallions less valuable. 
D)  the city greatly increased the number of medallions by selling new ones. 
E)  passenger-on-driver crime has made taxi driving a less desirable line of work. 
A)  the city instituted price caps as part of an effort to regulate the monopoly. 
B)  New Yorkers have turned to walking and bicycling as ways to get around. 
C)  ridesharing services like Uber have made the medallions less valuable. 
D)  the city greatly increased the number of medallions by selling new ones. 
E)  passenger-on-driver crime has made taxi driving a less desirable line of work.

Question 18

Barriers to entry

Accepted Answer

A)  measure the ability of firms to set the price for a good. 
B)  do not exist for monopolies. 
C)  always lead to profits. 
D)  restrict the entry of new firms into the market. 
E)  exist for perfectly competitive firms. 
A)  measure the ability of firms to set the price for a good. 
B)  do not exist for monopolies. 
C)  always lead to profits. 
D)  restrict the entry of new firms into the market. 
E)  exist for perfectly competitive firms.

Question 19

Refer to the accompanying figure to answer the following questions.
  
-This firm

Accepted Answer

A)  is in a competitive market. 
B)  can make a profit. 
C)  does not want to maximize profit. 
D)  cannot make a profit. 
E)  is not a monopolist because it is incurring a loss. 
A)  is in a competitive market. 
B)  can make a profit. 
C)  does not want to maximize profit. 
D)  cannot make a profit. 
E)  is not a monopolist because it is incurring a loss.

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...

One way the government can restore competitiveness in a market is through

Explain the price effect and the output effect as it pertains to the marginal revenue of a monopolist.

Refer to the accompanying figure to answer the following questions. For a firm in a competitive market,the demand curve is horizontal,as shown. -What will happen if the firm offers its product at a price slightly above price P_C?

The ________ cost pricing rule means that the government can regulate a natural monopoly to minimize deadweight loss without forcing the private firm out of the market.

A natural monopoly

The monopolist's preferred production level,for maximum profit,is determined by the intersection of which two curves?

The profit-maximizing rule for a monopolist is

Refer to the accompanying figure to answer the following questions. -When a competitive market comes under the control of a monopoly,the quantity changes from

Patents and copyrights can

Refer to the accompanying figure to answer the following questions. -Which of the following is the profit-maximizing price and quantity combination?

When marginal revenue is positive,the

Some economists argue that a government-created monopoly in the medical field can be good for the overall growth of an economy,even though it does create deadweight loss.Support this argument.

The price effect refers to how

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Barriers to entry

Refer to the accompanying figure to answer the following questions. -This firm

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

International Trade

Filters

Exam 10: Understanding Monopoly

One way the government can restore competitiveness in a market is through

Explain the price effect and the output effect as it pertains to the marginal revenue of a monopolist.

Refer to the accompanying figure to answer the following questions. For a firm in a competitive market,the demand curve is horizontal,as shown. -What will happen if the firm offers its product at a price slightly above price PC?

The ________ cost pricing rule means that the government can regulate a natural monopoly to minimize deadweight loss without forcing the private firm out of the market.

A natural monopoly

The monopolist's preferred production level,for maximum profit,is determined by the intersection of which two curves?

The profit-maximizing rule for a monopolist is

Refer to the accompanying figure to answer the following questions. -When a competitive market comes under the control of a monopoly,the quantity changes from

Patents and copyrights can

Refer to the accompanying figure to answer the following questions. -Which of the following is the profit-maximizing price and quantity combination?

When marginal revenue is positive,the

Some economists argue that a government-created monopoly in the medical field can be good for the overall growth of an economy,even though it does create deadweight loss.Support this argument.

The price effect refers to how

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Barriers to entry

Refer to the accompanying figure to answer the following questions. -This firm

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

International Trade

Filters

Refer to the accompanying figure to answer the following questions. For a firm in a competitive market,the demand curve is horizontal,as shown. -What will happen if the firm offers its product at a price slightly above price P_C?