Question 1

Which of the following is an example of a barrier to entry?

Accepted Answer

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

Question 2

The legislation passed by Congress in 1914 to strengthen the government's powers and authorize private lawsuits is called the

Accepted Answer

A)   Morgan Act.
B)   Sherman Act.
C)   Clayton Act.
D)   14th Amendment.E) A) and C)
F) None of the above

Question 3

What happens to the price and quantity sold of a drug when its patent runs out?

Accepted Answer

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

Question 4

When a firm has a natural monopoly,the firm's

Accepted Answer

A)   marginal cost always exceeds its average total cost.
B)   total cost curve is horizontal.
C)   average total cost curve is downward sloping.
D)   marginal cost curve must lie above the firm's average total cost curve.E) A) and D)
F) B) and D)

Question 5

The fundamental source of monopoly power is

Accepted Answer

A)   barriers to entry.
B)   profit.
C)   decreasing average total cost.
D)   a product without close substitutes.E) C) and D)
F) A) and B)

Question 6

A monopolist

Accepted Answer

A)   has a supply curve that is upward-sloping,just like a competitive firm.
B)   does not have a supply curve because the monopolist sets its price at the same time it chooses the quantity to supply.
C)   has a horizontal supply curve,just like a competitive firm.
D)   does not have a supply curve because marginal revenue exceeds the price it charges for its products.E) C) and D)
F) B) and C)

Question 7

When we compare economic welfare in a monopoly market to a competitive market,the profits earned by the monopolist represent

Accepted Answer

A)   a transfer of benefits from the consumer to the producer.
B)   a loss in total welfare.
C)   the higher marginal costs incurred by the monopolists in comparison to competitive firms.
D)   the higher marginal revenues gained by the monopolists in comparison to competitive firms.E) A) and D)
F) A) and C)

Question 8

Selling a good at a price determined by the intersection of the demand curve and the marginal cost curve is consistent with the

Accepted Answer

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

Question 9

Which of the following is not an example of a barrier to entry?

Accepted Answer

A)   Mighty Mitch's Mining Company owns a unique plot of land in Tanzania,under which lies the only large deposit of Tanzanite in the world.
B)   A college student starts a part-time tutoring business.
C)   A novelist obtains a copyright for her new book.
D)   A taxi cab driver in New York City obtains a license to legally provide transportation in New York City.E) None of the above
F) A) and C)

Question 10

Patent and copyright laws are major sources of

Accepted Answer

A)   natural monopolies.
B)   government-created monopolies.
C)   resource monopolies.
D)   antitrust regulation.E) A) and B)
F) B) and D)

Question 11

If a social planner were running a monopoly,that planner could achieve an efficient outcome by charging the price that is determined by the

Accepted Answer

A)   minimum point on the average total cost curve.
B)   intersection of the average total cost curve and the demand curve.
C)   intersection of the marginal cost curve and the demand curve.
D)   intersection of the marginal cost curve and the marginal revenue curve.E) A) and B)
F) A) and C)

Question 12

Figure 15-1 
-Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm

Accepted Answer

A)   must lie entirely above the average total cost curve.
B)   must lie entirely below the average total cost curve.
C)   must be upward sloping.
D)   does not exist.E) All of the above
F) A) and D)

Question 13

Many movie theaters allow discount tickets to be sold to senior citizens because

Accepted Answer

A)   senior-citizen laws mandate such discounts.
B)   goodwill efforts show community respect and win loyal patrons.
C)   the theaters are profit maximizers.
D)   senior citizens lobby city councils for lower prices.E) All of the above
F) B) and C)

Question 14

In the market for "home heating" consumers typically have several options (e.g. ,electricity,heating fuel,natural gas,propane,etc. ),yet we often think of firms in this industry as behaving like monopolists.Discuss the context in which your electricity provider is a monopolist.Is this characterization universally applicable? Explain your answer.

Accepted Answer

In this case,the firms are monopolists i...

Question 15

Table 15-5
 
-Suppose that a monopolist produces good A.The profit-maximizing quantity is 40 units,the profit-maximizing price is $160,and the marginal cost of the 40th unit is $120.If good A were produced in a perfectly competitive market,the equilibrium quantity would be 50,and the equilibrium price would be $150.What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)   $40
B)   $100
C)   $200
D)   $400E) B) and C)
F) B) and D)

Question 16

Some companies merge in order to lower costs through efficient joint production.

Accepted Answer

A) True 
 B)False

Question 17

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Accepted Answer

The defining characteristic of...

Question 18

Name brand drugs are able to continue capitalizing on their market power even after generic drugs enter the market because

Accepted Answer

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

Question 19

Suppose a monopolist chooses the price and production level that maximizes its profit.From that point,to increase society's economic welfare,output would need to be increased as long as

Accepted Answer

A)   average revenue exceeds marginal cost.
B)   average revenue exceeds average total cost.
C)   marginal revenue exceeds marginal cost.
D)   marginal revenue exceeds average total cost.E) C) and D)
F) B) and C)

Question 20

Which of the following statements is not correct?

Accepted Answer

A)   Two examples of early antitrust laws are the Sherman and Clayton Antitrust Acts.
B)   Antitrust laws automatically prevent mergers between companies that produce similar products.
C)   Antitrust laws give the government power to increase competition.
D)   Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.E) B) and C)
F) A) and D)

Exam 15: Monopoly

Which of the following statements is not correct?

Correct Answer
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When we compare economic welfare in a monopoly market to a competitive market,the profits earned by the monopolist represent

Correct Answer
verified

If a social planner were running a monopoly,that planner could achieve an efficient outcome by charging the price that is determined by the

Correct Answer
verified

Figure 15-1 -Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm

Correct Answer
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Which of the following is not an example of a barrier to entry?

Correct Answer
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Which of the following is an example of a barrier to entry?

Correct Answer
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The fundamental source of monopoly power is

Correct Answer
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Many movie theaters allow discount tickets to be sold to senior citizens because

Correct Answer
verified

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct Answer
verified
The defining characteristic of...
View Answer

Name brand drugs are able to continue capitalizing on their market power even after generic drugs enter the market because

Correct Answer
verified

Patent and copyright laws are major sources of

Correct Answer
verified

Correct Answer
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A monopolist

Correct Answer
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Correct Answer
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In this case,the firms are monopolists i...
View Answer

The legislation passed by Congress in 1914 to strengthen the government's powers and authorize private lawsuits is called the

Correct Answer
verified

Some companies merge in order to lower costs through efficient joint production.

Correct Answer
verified

When a firm has a natural monopoly,the firm's

Correct Answer
verified

What happens to the price and quantity sold of a drug when its patent runs out?

Correct Answer
verified

Suppose a monopolist chooses the price and production level that maximizes its profit.From that point,to increase society's economic welfare,output would need to be increased as long as

Correct Answer
verified

Selling a good at a price determined by the intersection of the demand curve and the marginal cost curve is consistent with the

Correct Answer
verified

Exam 15: Monopoly

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

When we compare economic welfare in a monopoly market to a competitive market,the profits earned by the monopolist represent

Correct AnswerverifiedShow Answer

If a social planner were running a monopoly,that planner could achieve an efficient outcome by charging the price that is determined by the

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm

Correct AnswerverifiedShow Answer

Which of the following is not an example of a barrier to entry?

Correct AnswerverifiedShow Answer

Which of the following is an example of a barrier to entry?

Correct AnswerverifiedShow Answer

The fundamental source of monopoly power is

Correct AnswerverifiedShow Answer

Many movie theaters allow discount tickets to be sold to senior citizens because

Correct AnswerverifiedShow Answer

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct AnswerverifiedThe defining characteristic of...View AnswerShow Answer

Name brand drugs are able to continue capitalizing on their market power even after generic drugs enter the market because

Correct AnswerverifiedShow Answer

Patent and copyright laws are major sources of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopolist

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn this case,the firms are monopolists i...View AnswerShow Answer

The legislation passed by Congress in 1914 to strengthen the government's powers and authorize private lawsuits is called the

Correct AnswerverifiedShow Answer

Some companies merge in order to lower costs through efficient joint production.

Correct AnswerverifiedShow Answer

When a firm has a natural monopoly,the firm's

Correct AnswerverifiedShow Answer

What happens to the price and quantity sold of a drug when its patent runs out?

Correct AnswerverifiedShow Answer

Suppose a monopolist chooses the price and production level that maximizes its profit.From that point,to increase society's economic welfare,output would need to be increased as long as

Correct AnswerverifiedShow Answer

Selling a good at a price determined by the intersection of the demand curve and the marginal cost curve is consistent with the

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The defining characteristic of...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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In this case,the firms are monopolists i...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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