Question 1

A monopoly

Accepted Answer

A)  always makes a profit. 
B)  can force consumers to purchase what it is selling. 
C)  is characterized by a single seller who produces a well-defined product for which there are no good substitutes. 
D)  always has naturally created barriers. 
E)  always has government-created barriers. 
A)  always makes a profit. 
B)  can force consumers to purchase what it is selling. 
C)  is characterized by a single seller who produces a well-defined product for which there are no good substitutes. 
D)  always has naturally created barriers. 
E)  always has government-created barriers.

Question 2

The output 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 3

Refer to the accompanying figure to answer the following questions.
  
-The consumer surplus associated with this profit-maximizing monopoly is represented by areas

Accepted Answer

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

Question 4

Three natural barriers to entry are

Accepted Answer

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

Question 5

In instances when having a single firm in the market makes sense,governments ________ to minimize negative externalities.

Accepted Answer

A)  will grant a patent or copyright 
B)  require licenses 
C)  deregulate industries 
D)  hand out subsidies 
E)  break down barriers to entry 
A)  will grant a patent or copyright 
B)  require licenses 
C)  deregulate industries 
D)  hand out subsidies 
E)  break down barriers to entry

Question 6

Refer to the accompanying figure to answer the following questions.
  
-The deadweight loss associated with this profit-maximizing monopoly is represented by area(s)

Accepted Answer

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

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 +0 B + C + D + F + G + I + J. 
B)  B + D + G + E + H. 
C)  I + J. 
D)  C +  D + F +G + I + J. 
E)  E + H 
A)  A +0 B + C + D + F + G + I + J. 
B)  B + D + G + E + H. 
C)  I + J. 
D)  C +  D + F +G + I + J. 
E)  E + H

Question 8

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

Accepted Answer

A)  $25 and 100 
B)  $25 and 150 
C)  $13 and 100 
D)  $10 and 100 
E)  $10 and 150 
A)  $25 and 100 
B)  $25 and 150 
C)  $13 and 100 
D)  $10 and 100 
E)  $10 and 150

Question 9

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)  perfectly inelastic; downward sloping 
B)  horizontal; perfectly inelastic 
C)  downward sloping; perfectly elastic 
D)  downward sloping; horizontal 
E)  perfectly elastic; downward sloping 
A)  perfectly inelastic; downward sloping 
B)  horizontal; perfectly inelastic 
C)  downward sloping; perfectly elastic 
D)  downward sloping; horizontal 
E)  perfectly elastic; downward sloping

Question 10

Explain why it is unrealistic to regulate a natural monopoly for a price and quantity that maximizes total economic surplus in society.

Accepted Answer

A natural monopoly occurs because of lar

Question 11

If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30,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 12

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

Accepted Answer

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

Question 13

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 14

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 15

Answer the following questions based on the accompanying graph. 
   
a.What is the change in revenues associated with the price effect for this firm when the price decreases from $50 to $30?
b.What is the change in revenues associated with the output effect for this firm when the price decreases from $50 to $30?
c.Would the firm gain revenue if it lowered the price from $50 to $30? Explain.

Accepted Answer

a.The price effect refers to how lower p

Question 16

The equation of a firm's marginal revenue curve is estimated to be P = 50 - Q (quantity),and the equation of its marginal cost curve is estimated to be P = 10 + 3Q.The profit-maximizing price for this firm is

Accepted Answer

A)  $5. 
B)  $10. 
C)  $15. 
D)  $50. 
E)  $40. 
A)  $5. 
B)  $10. 
C)  $15. 
D)  $50. 
E)  $40.

A monopoly

The output effect refers to how

Refer to the accompanying figure to answer the following questions. -The consumer surplus associated with this profit-maximizing monopoly is represented by areas

Three natural barriers to entry are

In instances when having a single firm in the market makes sense,governments ________ to minimize negative externalities.

Refer to the accompanying figure to answer the following questions. -The deadweight loss associated with this profit-maximizing monopoly is represented by area(s)

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

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

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 .

Explain why it is unrealistic to regulate a natural monopoly for a price and quantity that maximizes total economic surplus in society.

If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30,the monopolist should ________ to maximize profits.

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

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

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

The equation of a firm's marginal revenue curve is estimated to be P = 50 - Q (quantity),and the equation of its marginal cost curve is estimated to be P = 10 + 3Q.The profit-maximizing price for this firm is

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

A monopoly

The output effect refers to how

Refer to the accompanying figure to answer the following questions. -The consumer surplus associated with this profit-maximizing monopoly is represented by areas

Three natural barriers to entry are

In instances when having a single firm in the market makes sense,governments ________ to minimize negative externalities.

Refer to the accompanying figure to answer the following questions. -The deadweight loss associated with this profit-maximizing monopoly is represented by area(s)

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

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

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 ________.

Explain why it is unrealistic to regulate a natural monopoly for a price and quantity that maximizes total economic surplus in society.

If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30,the monopolist should ________ to maximize profits.

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

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

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

The equation of a firm's marginal revenue curve is estimated to be P = 50 - Q (quantity),and the equation of its marginal cost curve is estimated to be P = 10 + 3Q.The profit-maximizing price for this firm is

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