Question 1

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.

Question 2

Figure 14-3 
-Refer to Figure 14-3.The demand curve for a monopoly firm is depicted by curve

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.

Question 3

Figure 14-15 
-Refer to Figure 14-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Accepted Answer

A)   $0.
B)   $100.
C)   $200.
D)   $500.

Question 4

Table 14-14
The following table gives information on the price,quantity,and total cost of production for a monopolist.
 
-Refer to Table 14-14.At what price does marginal revenue equal marginal cost?

Accepted Answer

A)   $5
B)   $4
C)   $3
D)   $2

Question 5

In many countries,the government chooses to "internalize" the monopoly by owning monopoly providers of goods and services.(In some cases these firms are "nationalized," and the government actually buys or confiscates firms that operate in monopoly markets).What would be the advantages and disadvantages of such an approach to ensure that the "best interest of society" is promoted in these markets? Explain your answer.

Accepted Answer

As long as the government "owner" pursue...

Question 6

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.

Question 7

Some prescription drugs sell for more in the United States than they do in other countries.Which of the following statements about this issue is most likely to be true?

Accepted Answer

A)   Drug companies are engaging in price discrimination,and this practice certainly reduces global social welfare.
B)   Global social welfare could be improved if the price in the United States were reduced to the price charged in other countries.
C)   Global social welfare could be improved if the price in the other countries were increased to the price charged in the United States.
D)   Drug companies are engaging in price discrimination,but this might improve global social welfare if it gives more people access to the drugs.

Question 8

The market demand curve for a monopolist is typically

Accepted Answer

A)   unit price elastic.
B)   downward sloping.
C)   horizontal.
D)   vertical.

Question 9

For a firm to price discriminate,

Accepted Answer

A)   it must be a natural monopoly.
B)   it must be regulated by the government.
C)   it must have some market power.
D)   consumers must tell the firm what they are willing to pay for the product.

Question 10

Figure 14-15 
-Refer to Figure 14-15.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Accepted Answer

A)   $500.
B)   $1,000.
C)   $2,000.
D)   $4,000.

Question 11

The socially efficient level of production occurs where the marginal cost curve intersects

Accepted Answer

A)   average variable cost.
B)   average total cost.
C)   demand.
D)   marginal revenue.

Question 12

Which of the following statements comparing monopoly with competition is correct?

Accepted Answer

A)   A monopolist produces a higher level of output and charges a lower price than a competitive firm would.
B)   With perfect price discrimination,the total surplus under monopoly can be the same as under competition.
C)   With or without price discrimination,the consumer surplus under monopoly is at least as large as it would be under competition.
D)   The deadweight loss associated with monopoly is caused by the positive economic profits of the monopolist; competitive firms do not earn a positive economic profit so there is no deadweight loss under competition.

Question 13

When a natural monopoly exists,it is

Accepted Answer

A)   always cost effective for government-owned firms to produce the product.
B)   never cost effective for one firm to produce the product.
C)   always cost effective for two or more private firms to produce the product.
D)   never cost effective for two or more private firms to produce the product.

Question 14

Table 14-4
A monopolist faces the following demand curve:
 
-Refer to Table 14-4.If the monopolist produces 10 units,what is its marginal revenue?

Accepted Answer

A)   $12.50
B)   $5
C)   -$5
D)   -$12.50

Question 15

Antitrust laws

Accepted Answer

A)   prevent firms from maximizing profits.
B)   allow the government to prevent mergers,even ones that would benefit consumers.
C)   require the government to measure both the benefits and costs of a potential merger.
D)   All of the above are correct.

Question 16

Table 14-9
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 14-9.At the profit-maximizing price,how much profit will the monopoly earn?

Accepted Answer

A)   $8
B)   $10
C)   $12
D)   $14

Question 17

Perfect price discrimination

Accepted Answer

A)   eliminates deadweight loss.
B)   reduces profits to the monopolist.
C)   decreases the total quantity sold by the monopolist.
D)   requires arbitrage in order for the monopolist to maximize profits.

Question 18

Table 14-7
Sally owns the only shoe store in town.She has the following cost and revenue information.
 
-Refer to Table 14-7.What is the total revenue from selling 8 pairs of shoes?

Accepted Answer

A)   $90
B)   $695
C)   $720
D)   $800

Question 19

Allowing an inventor to have the exclusive rights to market her new invention will lead to (i) a product that is priced higher than it would be without the exclusive rights.
(ii) desirable behavior in the sense that inventors are encouraged to invent.
(iii) higher profits for the inventor.

Accepted Answer

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

Question 20

Figure 14-3 
-Refer to Figure 14-3.The marginal revenue curve for a monopoly firm is depicted by curve

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.

Exam 14: Monopoly

Perfect price discrimination

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Antitrust laws

Correct Answer
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Figure 14-15 -Refer to Figure 14-15.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Correct Answer
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Figure 14-3 -Refer to Figure 14-3.The marginal revenue curve for a monopoly firm is depicted by curve

Correct Answer
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Table 14-14 The following table gives information on the price,quantity,and total cost of production for a monopolist. -Refer to Table 14-14.At what price does marginal revenue equal marginal cost?

Correct Answer
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Table 14-7 Sally owns the only shoe store in town.She has the following cost and revenue information. -Refer to Table 14-7.What is the total revenue from selling 8 pairs of shoes?

Correct Answer
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The market demand curve for a monopolist is typically

Correct Answer
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Table 14-4 A monopolist faces the following demand curve: -Refer to Table 14-4.If the monopolist produces 10 units,what is its marginal revenue?

Correct Answer
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The socially efficient level of production occurs where the marginal cost curve intersects

Correct Answer
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Allowing an inventor to have the exclusive rights to market her new invention will lead to (i) a product that is priced higher than it would be without the exclusive rights. (ii) desirable behavior in the sense that inventors are encouraged to invent. (iii) higher profits for the inventor.

Correct Answer
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Which of the following statements comparing monopoly with competition is correct?

Correct Answer
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When a natural monopoly exists,it is

Correct Answer
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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
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Table 14-9 Consider the following demand and cost information for a monopoly. -Refer to Table 14-9.At the profit-maximizing price,how much profit will the monopoly earn?

Correct Answer
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Figure 14-15 -Refer to Figure 14-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Correct Answer
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Some prescription drugs sell for more in the United States than they do in other countries.Which of the following statements about this issue is most likely to be true?

Correct Answer
verified

Figure 14-3 -Refer to Figure 14-3.The demand curve for a monopoly firm is depicted by curve

Correct Answer
verified

Correct Answer
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As long as the government "owner" pursue...
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For a firm to price discriminate,

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Exam 14: Monopoly

Perfect price discrimination

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Which of the following statements is not correct?

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Antitrust laws

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Figure 14-15 -Refer to Figure 14-15.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Correct AnswerverifiedShow Answer

Figure 14-3 -Refer to Figure 14-3.The marginal revenue curve for a monopoly firm is depicted by curve

Correct AnswerverifiedShow Answer

Table 14-14 The following table gives information on the price,quantity,and total cost of production for a monopolist. -Refer to Table 14-14.At what price does marginal revenue equal marginal cost?

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Table 14-7 Sally owns the only shoe store in town.She has the following cost and revenue information. -Refer to Table 14-7.What is the total revenue from selling 8 pairs of shoes?

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The market demand curve for a monopolist is typically

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Table 14-4 A monopolist faces the following demand curve: -Refer to Table 14-4.If the monopolist produces 10 units,what is its marginal revenue?

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The socially efficient level of production occurs where the marginal cost curve intersects

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Allowing an inventor to have the exclusive rights to market her new invention will lead to (i) a product that is priced higher than it would be without the exclusive rights. (ii) desirable behavior in the sense that inventors are encouraged to invent. (iii) higher profits for the inventor.

Correct AnswerverifiedShow Answer

Which of the following statements comparing monopoly with competition is correct?

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When a natural monopoly exists,it is

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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

Table 14-9 Consider the following demand and cost information for a monopoly. -Refer to Table 14-9.At the profit-maximizing price,how much profit will the monopoly earn?

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Figure 14-15 -Refer to Figure 14-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

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Some prescription drugs sell for more in the United States than they do in other countries.Which of the following statements about this issue is most likely to be true?

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Figure 14-3 -Refer to Figure 14-3.The demand curve for a monopoly firm is depicted by curve

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Correct AnswerverifiedAs long as the government "owner" pursue...View AnswerShow Answer

For a firm to price discriminate,

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As long as the government "owner" pursue...
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