Question 1

The U.S.Congress has given two government entities the authority to police mergers.These two entities are

Accepted Answer

A) the antitrust division of the Department of State and the Securities and Exchange Commission. 
B) the Federal Trade Commission and the Internal Revenue Service. 
C) the Antitrust Division of the U.S.Department of Justice and the Council of Economic Advisors. 
D) the Federal Trade Commission and the Antitrust Division of the U.S.Department of Justice. 
A) the antitrust division of the Department of State and the Securities and Exchange Commission. 
B) the Federal Trade Commission and the Internal Revenue Service. 
C) the Antitrust Division of the U.S.Department of Justice and the Council of Economic Advisors. 
D) the Federal Trade Commission and the Antitrust Division of the U.S.Department of Justice.

Question 2

Equilibrium in a perfectly competitive market results in the greatest amount of economic surplus,or total benefit to society,from the production of a good.Why,then,did Joseph Schumpeter argue that an economy may benefit more from firms that have market power than from firms that are perfectly competitive?

Accepted Answer

Schumpeter did not deny that perfectly c

Question 3

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

Accepted Answer

A) Price will be higher,output will be lower and the deadweight loss will be eliminated. 
B) Consumer surplus will be smaller,producer surplus will be greater and there will be a reduction in economic efficiency. 
C) Price will be higher,consumer surplus will be greater and output will be greater. 
D) Consumer surplus will be smaller and producer surplus will be greater.There will be a net increase in economic surplus. 
A) Price will be higher,output will be lower and the deadweight loss will be eliminated. 
B) Consumer surplus will be smaller,producer surplus will be greater and there will be a reduction in economic efficiency. 
C) Price will be higher,consumer surplus will be greater and output will be greater. 
D) Consumer surplus will be smaller and producer surplus will be greater.There will be a net increase in economic surplus.

Question 4

Figure 15-3   Figure 15-3 shows the cost and demand curves for a monopolist.
-Refer to Figure 15-3.The profit-maximizing output and price for the monopolist are

Accepted Answer

A) output = 62; price = $24. 
B) output = 62; price = $18. 
C) output = 83; price = $22. 
D) output = 104; price = $20.80. 
A) output = 62; price = $24. 
B) output = 62; price = $18. 
C) output = 83; price = $22. 
D) output = 104; price = $20.80.

Question 5

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements comparing the conditions in the industry under both market structures is true?

Accepted Answer

A) A monopoly will produce more and charge a higher price than would a perfectly competitive industry producing the same good. 
B) A monopoly will produce more and advertise more than would a perfectly competitive industry producing the same good. 
C) A monopoly will produce less and charge a higher price than would a perfectly competitive industry producing the same good. 
D) A monopoly will produce less and charge a lower price than would a perfectly competitive industry producing the same good. 
A) A monopoly will produce more and charge a higher price than would a perfectly competitive industry producing the same good. 
B) A monopoly will produce more and advertise more than would a perfectly competitive industry producing the same good. 
C) A monopoly will produce less and charge a higher price than would a perfectly competitive industry producing the same good. 
D) A monopoly will produce less and charge a lower price than would a perfectly competitive industry producing the same good.

Question 6

Which antitrust law prohibited firms from buying stock in competitors and from having directors serve on the boards of competing firms?

Accepted Answer

A) the Clayton Act 
B) the Securities and Exchange Act 
C) the Sherman Act 
D) the Robinson-Patman Act 
A) the Clayton Act 
B) the Securities and Exchange Act 
C) the Sherman Act 
D) the Robinson-Patman Act

Question 7

Whenever a firm can charge a price greater than marginal cost,

Accepted Answer

A) the firm must be a monopolist. 
B) there is some loss of economic efficiency. 
C) consumers have the ability to choose a close substitute. 
D) the firm will earn economic profits. 
A) the firm must be a monopolist. 
B) there is some loss of economic efficiency. 
C) consumers have the ability to choose a close substitute. 
D) the firm will earn economic profits.

Question 8

When the government makes a firm the exclusive legal provider of a good or service,it grants the firm

Accepted Answer

A) a copyright. 
B) a network externality. 
C) a quota. 
D) a public franchise. 
A) a copyright. 
B) a network externality. 
C) a quota. 
D) a public franchise.

Question 9

The 10-year protection period from generic competition for drug manufacturers is a form of

Accepted Answer

A) copyright. 
B) trademark. 
C) hallmark. 
D) patent. 
A) copyright. 
B) trademark. 
C) hallmark. 
D) patent.

Question 10

Table 15-1
   The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes.Table 15-1 shows the cost and demand data for this government protected monopolist.
-Refer to Table 15-1.What is the profit-maximizing quantity and price for the monopolist?

Accepted Answer

A) Quantity = 8 cases,Price = $9 
B) Quantity = 7 cases,Price = $10 
C) Quantity = 9 cases,Price = $8 
D) Quantity = 10 cases,Price = $7 
A) Quantity = 8 cases,Price = $9 
B) Quantity = 7 cases,Price = $10 
C) Quantity = 9 cases,Price = $8 
D) Quantity = 10 cases,Price = $7

Question 11

If a firm is a natural monopoly,competition from other firms cannot be counted on to force price down to the level where the company earns zero economic profit.How are prices usually set in natural monopoly markets in the United States?

Accepted Answer

A) Each natural monopoly is made a public franchise.The public franchise is then required to set its price equal to its marginal cost. 
B) Natural monopolies are privately owned,but prices proposed by the firms must be approved by the Antitrust Division of the Department of Justice. 
C) Natural monopolies are privately owned and allowed to set their own prices.Government regulation of the firms would result in greater deadweight losses. 
D) Local or state regulatory commissions usually set prices for natural monopolies. 
A) Each natural monopoly is made a public franchise.The public franchise is then required to set its price equal to its marginal cost. 
B) Natural monopolies are privately owned,but prices proposed by the firms must be approved by the Antitrust Division of the Department of Justice. 
C) Natural monopolies are privately owned and allowed to set their own prices.Government regulation of the firms would result in greater deadweight losses. 
D) Local or state regulatory commissions usually set prices for natural monopolies.

Question 12

A monopoly firm is the only seller of a good or service that

Accepted Answer

A) has a perfectly elastic demand. 
B) has no close complements. 
C) does not need to be advertised. 
D) does not have a close substitute. 
A) has a perfectly elastic demand. 
B) has no close complements. 
C) does not need to be advertised. 
D) does not have a close substitute.

Question 13

Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?

Accepted Answer

A) The monopoly firm has control of a key resource necessary to produce a good. 
B) There are important network externalities in supplying a good or service. 
C) large economies of scale that result in a natural monopoly 
D) a high concentration ratio 
A) The monopoly firm has control of a key resource necessary to produce a good. 
B) There are important network externalities in supplying a good or service. 
C) large economies of scale that result in a natural monopoly 
D) a high concentration ratio

Question 14

Which of the following statements is true?

Accepted Answer

A) Monopolists are price makers.All other firms are price takers. 
B) Unlike other industries,monopoly industries have high barriers to entry. 
C) Only monopoly firms are granted patents and copyrights. 
D) Unlike other firms,a monopolist's demand curve is the same as the market demand curve. 
A) Monopolists are price makers.All other firms are price takers. 
B) Unlike other industries,monopoly industries have high barriers to entry. 
C) Only monopoly firms are granted patents and copyrights. 
D) Unlike other firms,a monopolist's demand curve is the same as the market demand curve.

The U.S.Congress has given two government entities the authority to police mergers.These two entities are

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

Figure 15-3 Figure 15-3 shows the cost and demand curves for a monopolist. -Refer to Figure 15-3.The profit-maximizing output and price for the monopolist are

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements comparing the conditions in the industry under both market structures is true?

Which antitrust law prohibited firms from buying stock in competitors and from having directors serve on the boards of competing firms?

Whenever a firm can charge a price greater than marginal cost,

When the government makes a firm the exclusive legal provider of a good or service,it grants the firm

The 10-year protection period from generic competition for drug manufacturers is a form of

If a firm is a natural monopoly,competition from other firms cannot be counted on to force price down to the level where the company earns zero economic profit.How are prices usually set in natural monopoly markets in the United States?

A monopoly firm is the only seller of a good or service that

Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?

Which of the following statements is true?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Filters

Exam 15: Monopoly and Antitrust Policy

The U.S.Congress has given two government entities the authority to police mergers.These two entities are

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

Figure 15-3 Figure 15-3 shows the cost and demand curves for a monopolist. -Refer to Figure 15-3.The profit-maximizing output and price for the monopolist are

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements comparing the conditions in the industry under both market structures is true?

Which antitrust law prohibited firms from buying stock in competitors and from having directors serve on the boards of competing firms?

Whenever a firm can charge a price greater than marginal cost,

When the government makes a firm the exclusive legal provider of a good or service,it grants the firm

The 10-year protection period from generic competition for drug manufacturers is a form of

If a firm is a natural monopoly,competition from other firms cannot be counted on to force price down to the level where the company earns zero economic profit.How are prices usually set in natural monopoly markets in the United States?

A monopoly firm is the only seller of a good or service that

Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?

Which of the following statements is true?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Filters