Question 1

Antitrust laws allow the government to

Accepted Answer

A)   collect revenues through the antitrust tax.
B)   break up companies.
C)   purchase privately-held companies through eminent domain.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 2

Figure 15-3 
-Refer to Figure 15-3.Profit will be maximized by charging a price equal to

Accepted Answer

A)   P1.
B)   P2.
C)   P3.
D)   P4.E) All of the above
F) A) and B)

Question 3

Which of the following is a characteristic of a monopoly?

Accepted Answer

A)   low fixed costs as a portion of total costs
B)   free entry and exit
C)   barriers to entry
D)   declining marginal costE) None of the above
F) A) and B)

Question 4

Government intervention always reduces monopoly deadweight loss.

Accepted Answer

A) True 
 B)False

Question 5

Table 15-8
The following table provides information on the price,quantity,and average total cost for a monopoly.
 
-Refer to Table 15-8.What is the maximum profit that the monopolist can earn?

Accepted Answer

A)   $10
B)   $20
C)   $30
D)   $40E) A) and D)
F) A) and B)

Question 6

Economic welfare is generally measured by (i) 
Profit.
(ii) 
Total surplus.
(iii) 
The price consumers pay for the product.

Accepted Answer

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

Question 7

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 earn 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) C) and D)

Question 8

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Accepted Answer

If deregulation leads to increased compe...

Question 9

The task of economic regulation is to

Accepted Answer

A)   protect monopoly profits.
B)   approximate the results of the competitive market.
C)   replace competition with government ownership.
D)   increase competition within the market.E) A) and B)
F) All of the above

Question 10

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) C) and D)
F) B) and C)

Question 11

Figure 15-2    
-Refer to Figure 15-2.Which of the following statements is correct?

Accepted Answer

A)   Panel C represents the typical demand curve for a perfectly competitive industry.
B)   Panel B represents the typical demand curve for a monopoly.
C)   Panel B represents the typical demand curve for a perfectly competitive firm.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 12

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

A)   preventing mergers through antitrust laws
B)   regulating the prices that monopolies can charge
C)   doing nothing
D)   None of the above strategies is preferred.Each is a viable strategy.E) C) and D)
F) A) and B)

Question 13

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

Accepted Answer

A)   a loss in total welfare.
B)   a transfer of benefits from the buyer to the seller.
C)   the higher marginal costs incurred by the monopolists in comparison to competitive firms.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 14

Figure 15-4 
-Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)   P4 x Q3.
B)   (P4-P2) x Q3.
C)   (P4-P1) x Q3.
D)   (P5-P0) x Q1.E) B) and C)
F) A) and B)

Question 15

Many economists criticize monopolists because they

Accepted Answer

A)   charge a price that equals marginal cost rather than a price that equals average cost.
B)   do not innovate.
C)   produce a large quantity of waste.
D)   produce less than the socially efficient level of output.E) B) and C)
F) C) and D)

Question 16

When deciding what price to charge consumers,the monopolist may choose to charge them different prices based on the customers'

Accepted Answer

A)   geographical location.
B)   age.
C)   income.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 17

Figure 15-6 
-Refer to Figure 15-6.In order to maximize profits,the monopolist should produce

Accepted Answer

A)   9 units.
B)   12 units.
C)   15 units.
D)   more than 15 units.E) A) and B)
F) B) and C)

Question 18

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Accepted Answer

A) True 
 B)False

Question 19

If the distribution of water is a natural monopoly,then (i) 
Multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
(ii) 
Allowing for competition among different firms in the water-distribution industry is efficient.
(iii) 
A single firm can serve the market at the lowest possible average total cost.

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) and (iii) only
D)   (iii) onlyE) A) and B)
F) None of the above

Question 20

In order for antitrust laws to raise social welfare,the government must

Accepted Answer

A)   disallow synergy benefits from accruing to monopolists.
B)   disallow any mergers from taking place.
C)   be able to determine which mergers are desirable and which are not.
D)   always attempt to keep markets in their most competitive form.E) A) and D)
F) None of the above

Exam 15: Monopoly

In order for antitrust laws to raise social welfare,the government must

Correct Answer
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Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

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

When deciding what price to charge consumers,the monopolist may choose to charge them different prices based on the customers'

Correct Answer
verified

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

Correct Answer
verified

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Correct Answer
verified

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

Correct Answer
verified

The task of economic regulation is to

Correct Answer
verified

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Correct Answer
verified
If deregulation leads to increased compe...
View Answer

Economic welfare is generally measured by (i) Profit. (ii) Total surplus. (iii) The price consumers pay for the product.

Correct Answer
verified

Which of the following is a characteristic of a monopoly?

Correct Answer
verified

Correct Answer
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Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Correct Answer
verified

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Correct Answer
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Government intervention always reduces monopoly deadweight loss.

Correct Answer
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Figure 15-6 -Refer to Figure 15-6.In order to maximize profits,the monopolist should produce

Correct Answer
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Antitrust laws allow the government to

Correct Answer
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Many economists criticize monopolists because they

Correct Answer
verified

Figure 15-3 -Refer to Figure 15-3.Profit will be maximized by charging a price equal to

Correct Answer
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Table 15-8 The following table provides information on the price,quantity,and average total cost for a monopoly. -Refer to Table 15-8.What is the maximum profit that the monopolist can earn?

Correct Answer
verified

Exam 15: Monopoly

In order for antitrust laws to raise social welfare,the government must

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

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

When deciding what price to charge consumers,the monopolist may choose to charge them different prices based on the customers'

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A patent gives a single person or firm the exclusive right to sell some good or service forever.

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

The task of economic regulation is to

Correct AnswerverifiedShow Answer

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Correct AnswerverifiedIf deregulation leads to increased compe...View AnswerShow Answer

Economic welfare is generally measured by (i) Profit. (ii) Total surplus. (iii) The price consumers pay for the product.

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a monopoly?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Government intervention always reduces monopoly deadweight loss.

Correct AnswerverifiedShow Answer

Figure 15-6 -Refer to Figure 15-6.In order to maximize profits,the monopolist should produce

Correct AnswerverifiedShow Answer

Antitrust laws allow the government to

Correct AnswerverifiedShow Answer

Many economists criticize monopolists because they

Correct AnswerverifiedShow Answer

Figure 15-3 -Refer to Figure 15-3.Profit will be maximized by charging a price equal to

Correct AnswerverifiedShow Answer

Table 15-8 The following table provides information on the price,quantity,and average total cost for a monopoly. -Refer to Table 15-8.What is the maximum profit that the monopolist can earn?

Correct AnswerverifiedShow Answer

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If deregulation leads to increased compe...
View Answer

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