Question 1

A government-owned monopoly is more likely to:

Accepted Answer

A)  provide a greater quantity of output than a private one.
B)  provide output at a lower price than a private one.
C)  serve public interest than maximize profit.
D)  All of these statements are true.E) B) and C)
F) C) and D)

Question 2

A natural monopolist that sets prices equal to marginal cost will:

Accepted Answer

A)  set a price below average total costs.
B)  be efficient.
C)  incur losses.
D)  All of these statements are true.E) A) and B)
F) All of the above

Question 3

The regulation of natural monopolies is common in the:

Accepted Answer

A)  tap water industry.
B)  electricity industry.
C)  natural gas industry.
D)  Regulation is common in all of these industries.E) B) and D)
F) A) and C)

Question 4

A consequence of a publicly owned natural monopoly is:

Accepted Answer

A)  the loss of the profit motive.
B)  an increase in the motivation to improve efficiency.
C)  increased public pressure to reduce costs.
D)  reduced chance to remain open longer than political terms of office.E) All of the above
F) A) and C)

Question 5

This table represents the revenues faced by a monopolist. 
Using the information in the table shown,the average revenue for 5 units is:

Accepted Answer

A)  $600
B)  $300
C)  $3,000
D)  $120E) A) and C)
F) B) and D)

Question 6

Public policy responses to a monopoly:

Accepted Answer

A)  aim to break up existing monopolies.
B)  prevent new monopolies from forming.
C)  ease the effect of monopoly power on consumers.
D)  All of these statements are true.E) None of the above
F) All of the above

Question 7

The monopolist's cost curves differ from those of a perfectly competitive firm in that the:

Accepted Answer

A)  marginal cost curve is downward sloping instead of flat.
B)  average total cost curve is not necessarily minimized where it crosses marginal cost.
C)  average variable cost in no longer equal to marginal cost.
D)  The cost curves are the same for a firm regardless of market structure.E) All of the above
F) None of the above

Question 8

At any quantity of output below the intersection of the marginal revenue and marginal cost curves:

Accepted Answer

A)  MR is higher than MC.
B)  MC is higher than MR.
C)  ATC is lower than AVC.
D)  the firm would lose profits producing the units.E) B) and D)
F) B) and C)

Question 9

A monopoly:

Accepted Answer

A)  has no competition at all.
B)  has complete market control.
C)  restricts output to maximize profits.
D)  All of these statements are true.E) A) and C)
F) B) and C)

Question 10

The equilibrium price and quantity in a monopoly market:

Accepted Answer

A)  is efficient.
B)  is the same as a perfectly competitive market.
C)  causes a loss of total surplus.
D)  causes no welfare costs.E) B) and C)
F) B) and D)

Question 11

Monopoly power in a market causes:

Accepted Answer

A)  monopolists to profit.
B)  consumers to lose.
C)  surplus to be lost.
D)  All of these statements are true.E) A) and B)
F) A) and C)

Question 12

One barrier to entry into a monopoly market is:

Accepted Answer

A)  a natural monopoly.
B)  commonplace inputs.
C)  bulk buying.
D)  price gouging.E) A) and B)
F) A) and C)

Question 13

The regulation of natural monopolies is common in which of the following industries?

Accepted Answer

A)  Electricity
B)  Oil
C)  Tobacco
D)  AlcoholE) B) and C)
F) A) and D)

Question 14

This table represents the revenues faced by a monopolist. rd unit is: A) $600 B) $100 C) $800 D) $500" class="answers-bank-image d-inline" rel="preload" >
Using the information in the table shown,the marginal revenue for the 3rd unit is:

Accepted Answer

A)  $600
B)  $100
C)  $800
D)  $500E) B) and C)
F) A) and D)

Question 15

For a monopolist,the quantity effect:

Accepted Answer

A)  is the increase in revenues from selling a greater quantity at a lower price.
B)  is the decrease in revenues from selling a greater quantity at a lower price.
C)  is always outweighed by the price effect.
D)  always outweighs the price effect.E) A) and B)
F) A) and C)

Question 16

In the real world:

Accepted Answer

A)  perfect price discrimination is impossible.
B)  businesses can easily identify different groups' willingness to pay,so price discrimination is prevalent in every market.
C)  price discrimination is practiced less today than it was in the mid-1900s.
D)  price discrimination has only been observed where monopolies are present.E) A) and B)
F) A) and C)

Question 17

Government regulations:

Accepted Answer

A)  always seek to increase competition.
B)  sometimes protect monopoly power in certain industries.
C)  never protect monopoly rights.
D)  usually are ineffective.E) B) and D)
F) B) and C)

Question 18

A monopolist can maximize profits by:

Accepted Answer

A)  selling as much as he can produce.
B)  producing at the level of output at which MR = 0.
C)  following the same rules as a perfectly competitive firm.
D)  None of these statements is true.E) C) and D)
F) A) and B)

Question 19

One way a government might protect monopoly rights is by:

Accepted Answer

A)  protecting intellectual property rights.
B)  subsidizing a state-owned entity.
C)  making it illegal to enter an industry.
D)  All of these are ways to protect monopoly rights.E) B) and D)
F) All of the above

Question 20

For a monopolist,at the profit-maximizing level of output:

Accepted Answer

A)  price is greater than average revenue.
B)  average revenue is greater than marginal cost.
C)  marginal cost is greater than price.
D)  None of these statements is true.E) All of the above
F) B) and D)

Exam 14: Monopoly

The regulation of natural monopolies is common in the:

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Government regulations:

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In the real world:

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One barrier to entry into a monopoly market is:

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A natural monopolist that sets prices equal to marginal cost will:

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Public policy responses to a monopoly:

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The equilibrium price and quantity in a monopoly market:

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Monopoly power in a market causes:

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For a monopolist,the quantity effect:

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At any quantity of output below the intersection of the marginal revenue and marginal cost curves:

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A government-owned monopoly is more likely to:

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The monopolist's cost curves differ from those of a perfectly competitive firm in that the:

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A consequence of a publicly owned natural monopoly is:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the average revenue for 5 units is:

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The regulation of natural monopolies is common in which of the following industries?

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One way a government might protect monopoly rights is by:

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For a monopolist,at the profit-maximizing level of output:

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A monopolist can maximize profits by:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 3rd unit is:

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A monopoly:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 3^rd unit is:

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