Question 1

The marginal revenue lies ________ the demand curve because there is a(n)________ effect whenever the price is lowered.

Accepted Answer

A)  above; price 
B)  below; price 
C)  below; output 
D)  above; output 
E)  on; price 
A)  above; price 
B)  below; price 
C)  below; output 
D)  above; output 
E)  on; price

Question 2

Reducing trade barriers creates ________ competition,________ the influence of monopoly,and ________ the efficient use of resources.

Accepted Answer

A)  less; reduces; promotes 
B)  more; reduces; promotes 
C)  less; increases; promotes 
D)  more; reduces; hinders 
E)  more; increases; hinders 
A)  less; reduces; promotes 
B)  more; reduces; promotes 
C)  less; increases; promotes 
D)  more; reduces; hinders 
E)  more; increases; hinders

Question 3

The demand curve for the product of a firm in a competitive market is ________,and the demand curve for the product of a monopolist is ________.

Accepted Answer

A)  horizontal; downward sloping 
B)  horizontal; horizontal 
C)  downward sloping; upward sloping 
D)  downward sloping; horizontal 
E)  upward sloping; downward sloping 
A)  horizontal; downward sloping 
B)  horizontal; horizontal 
C)  downward sloping; upward sloping 
D)  downward sloping; horizontal 
E)  upward sloping; downward sloping

Question 4

Why do copyrights expire after a set period of time?

Accepted Answer

A)  so that creative industries will operate as efficiently as possible 
B)  to provide an incentive for artists and other creators of original work 
C)  to ensure that creative activity gets the publicity it deserves 
D)  so that in the long run,creative works are readily and cheaply available 
E)  to help writers and musicians become price makers 
A)  so that creative industries will operate as efficiently as possible 
B)  to provide an incentive for artists and other creators of original work 
C)  to ensure that creative activity gets the publicity it deserves 
D)  so that in the long run,creative works are readily and cheaply available 
E)  to help writers and musicians become price makers

Question 5

Control of resources is an example of

Accepted Answer

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

Question 6

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 7

Monopolies result in a(n)________ level of output and provide ________ choice to consumers.

Accepted Answer

A)  inefficient; less 
B)  inefficient; more 
C)  efficient; less 
D)  efficient; more 
E)  high; more 
A)  inefficient; less 
B)  inefficient; more 
C)  efficient; less 
D)  efficient; more 
E)  high; more

Question 8

Refer to the accompanying figure to answer the following questions.
  
-The demand curve for Arnold's Airport Shuttle is downward sloping.With only this information,it can be concluded that Arnold's Airport Shuttle

Accepted Answer

A)  is the only firm in the market for airport shuttles. 
B)  is currently maximizing profits. 
C)  is a price maker. 
D)  makes economic profits. 
E)  should produce where the demand curve crosses marginal cost. 
A)  is the only firm in the market for airport shuttles. 
B)  is currently maximizing profits. 
C)  is a price maker. 
D)  makes economic profits. 
E)  should produce where the demand curve crosses marginal cost.

Question 9

Which of the following is a characteristic of a monopoly but not of a competitive market?

Accepted Answer

A) A monopoly contains many firms. B) price > marginal cost C) price < marginal cost D) price = marginal cost E) A firm in a monopoly is a price taker. A) A monopoly contains many firms. B) price > marginal cost C) price < marginal cost D) price = marginal cost E) A firm in a monopoly is a price taker.

Question 10

Rent seeking occurs when

Accepted Answer

A)  resources are used to deregulate a market through the political process. 
B)  resources are used to maximize profits. 
C)  resources are used to secure monopoly rights through the political process. 
D)  two firms try to enter the same market. 
E)  landlords attempt to raise the rent on tenants. 
A)  resources are used to deregulate a market through the political process. 
B)  resources are used to maximize profits. 
C)  resources are used to secure monopoly rights through the political process. 
D)  two firms try to enter the same market. 
E)  landlords attempt to raise the rent on tenants.

Question 11

Make the case for government regulation of high-speed Internet service,using the concept of elasticity of demand.

Accepted Answer

In many places the market for high-speed

Question 12

If a monopolist is producing a quantity where marginal revenue is equal to $16 and the marginal cost is equal to $17,the monopolist should ________ to maximize profits.

Accepted Answer

A)  increase production and lower the price 
B)  decrease production and increase the price 
C)  continue producing at the current price 
D)  increase production and increase the price 
E)  decrease production and decrease the price 
A)  increase production and lower the price 
B)  decrease production and increase the price 
C)  continue producing at the current price 
D)  increase production and increase the price 
E)  decrease production and decrease the price

Question 13

When several goods or services are sold together as a single take-it-or-leave-it package,that package is called a(n)

Accepted Answer

A)  bundle. 
B)  grouping. 
C)  cluster. 
D)  fusion. 
E)  aggregate. 
A)  bundle. 
B)  grouping. 
C)  cluster. 
D)  fusion. 
E)  aggregate.

Question 14

Refer to the accompanying figure to answer the following questions.
  
-Which price and quantity combination is undesirable for both the monopolist firm and society?

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 15

In Alabama,it is illegal to hunt alligators without a license.The government controls the number of licenses that can be purchased each year; thus,there is a limit on the number that can be purchased.Assuming there is an unlimited supply of alligators in Alabama,what would happen to the price and quantity of alligator sausage if the government stopped controlling the number of these hunting licenses?

Accepted Answer

By controlling the number of licenses th

Question 16

Reginald has developed a new social media site that he feels can compete heavily with Facebook.Unfortunately,he cannot find someone to lend him enough money to market his product to consumers.Reginald is facing which kind of barrier to entry?

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 17

To maximize profits,a monopolist chooses the quantity where

Accepted Answer

A)  revenues are maximized. 
B)  marginal revenue equals zero. 
C)  marginal cost equals zero. 
D)  marginal revenue equals marginal cost. 
E)  costs are minimized. 
A)  revenues are maximized. 
B)  marginal revenue equals zero. 
C)  marginal cost equals zero. 
D)  marginal revenue equals marginal cost. 
E)  costs are minimized.

Question 18

The government oversight and management of monopolies

Accepted Answer

A)  is illegal in most cases. 
B)  never increases efficiency. 
C)  always increases efficiency. 
D)  is problematic because government agencies do not care about deadweight loss. 
E)  is problematic because there are no incentives to keep costs in check. 
A)  is illegal in most cases. 
B)  never increases efficiency. 
C)  always increases efficiency. 
D)  is problematic because government agencies do not care about deadweight loss. 
E)  is problematic because there are no incentives to keep costs in check.

Question 19

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry

Accepted Answer

A)  will easily be able to gain market power. 
B)  have lower average costs. 
C)  do not have high fixed costs. 
D)  will have much higher average costs. 
E)  experience a government-created barrier. 
A)  will easily be able to gain market power. 
B)  have lower average costs. 
C)  do not have high fixed costs. 
D)  will have much higher average costs. 
E)  experience a government-created barrier.

Question 20

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.

The marginal revenue lies the demand curve because there is a(n) effect whenever the price is lowered.

Reducing trade barriers creates competition, the influence of monopoly,and the efficient use of resources.

The demand curve for the product of a firm in a competitive market is ,and the demand curve for the product of a monopolist is .

Why do copyrights expire after a set period of time?

Control of resources is an example of

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

Monopolies result in a(n) level of output and provide choice to consumers.

Refer to the accompanying figure to answer the following questions. -The demand curve for Arnold's Airport Shuttle is downward sloping.With only this information,it can be concluded that Arnold's Airport Shuttle

Which of the following is a characteristic of a monopoly but not of a competitive market?

Rent seeking occurs when

Make the case for government regulation of high-speed Internet service,using the concept of elasticity of demand.

If a monopolist is producing a quantity where marginal revenue is equal to $16 and the marginal cost is equal to $17,the monopolist should ________ to maximize profits.

When several goods or services are sold together as a single take-it-or-leave-it package,that package is called a(n)

Refer to the accompanying figure to answer the following questions. -Which price and quantity combination is undesirable for both the monopolist firm and society?

Reginald has developed a new social media site that he feels can compete heavily with Facebook.Unfortunately,he cannot find someone to lend him enough money to market his product to consumers.Reginald is facing which kind of barrier to entry?

To maximize profits,a monopolist chooses the quantity where

The government oversight and management of monopolies

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry

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

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

The marginal revenue lies ________ the demand curve because there is a(n)________ effect whenever the price is lowered.

Reducing trade barriers creates ________ competition,________ the influence of monopoly,and ________ the efficient use of resources.

The demand curve for the product of a firm in a competitive market is ________,and the demand curve for the product of a monopolist is ________.

Why do copyrights expire after a set period of time?

Control of resources is an example of

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

Monopolies result in a(n)________ level of output and provide ________ choice to consumers.

Refer to the accompanying figure to answer the following questions. -The demand curve for Arnold's Airport Shuttle is downward sloping.With only this information,it can be concluded that Arnold's Airport Shuttle

Which of the following is a characteristic of a monopoly but not of a competitive market?

Rent seeking occurs when

Make the case for government regulation of high-speed Internet service,using the concept of elasticity of demand.

If a monopolist is producing a quantity where marginal revenue is equal to $16 and the marginal cost is equal to $17,the monopolist should ________ to maximize profits.

When several goods or services are sold together as a single take-it-or-leave-it package,that package is called a(n)

Refer to the accompanying figure to answer the following questions. -Which price and quantity combination is undesirable for both the monopolist firm and society?

Reginald has developed a new social media site that he feels can compete heavily with Facebook.Unfortunately,he cannot find someone to lend him enough money to market his product to consumers.Reginald is facing which kind of barrier to entry?

To maximize profits,a monopolist chooses the quantity where

The government oversight and management of monopolies

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry

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

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

The marginal revenue lies the demand curve because there is a(n) effect whenever the price is lowered.

Reducing trade barriers creates competition, the influence of monopoly,and the efficient use of resources.

The demand curve for the product of a firm in a competitive market is ,and the demand curve for the product of a monopolist is .

Monopolies result in a(n) level of output and provide choice to consumers.