Reference: Ref 13-4
(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia
runs a natural monopoly producing electricity for a small mountain village. The
accompanying table shows Lenoia’s demand and total cost of producing electricity.
The maximum profit Lenoia can make is:
$1,800.
126. Multiple Choice: If a monopoly is producing at the pro...
Question If a monopoly is producing at the profit-maximizing level of output, then we can
assume that at that level of output, demand is:
price unit–elastic.
127. Multiple Choice: In 1999, a judge declared that Micros...
Question In 1999, a judge declared that Microsoft was a monopolist. Assuming that it is
maximizing its profits at its current level of output, we may conclude that if
Microsoft were to increase its price, its total revenue would:
Answer rise.
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128. Multiple Choice: Figure: Computing Monopoly Profit Ref…
Question Figure: Computing Monopoly Profit
Reference: Ref 13-5
(Figure: Computing Monopoly Profit) Look at the figure Computing Monopoly Profit.
The profit-maximizing price is ________ and will generate total economic profit of
________.
Answer P2; EF
129. Multiple Choice: Figure: Computing Monopoly Profit Ref…
Question
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Figure: Computing Monopoly Profit
Reference: Ref 13-5
(Figure: Computing Monopoly Profit) Look at the figure Computing Monopoly Profit.
Producing at point N would:
Answer result in MR = MC.
130. Multiple Choice: Figure: Computing Monopoly Profit Ref…
Question
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Figure: Computing Monopoly Profit
Reference: Ref 13-5
(Figure: Computing Monopoly Profit) Look at the figure Computing Monopoly Profit.
At the profit-maximizing output, total cost is:
Answer P10Q1G.
131. Multiple Choice: Figure: Computing Monopoly Profit Ref…
Question
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Figure: Computing Monopoly Profit
Reference: Ref 13-5
(Figure: Computing Monopoly Profit) Look at the figure Computing Monopoly Profit.
In order to obtain maximum profits, the monopoly should produce the output
determined by point:
K.
132. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. The profit-
maximizing quantity is at point:
Answer W.
133. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. The profit-
maximizing price is:
Answer Z.
134. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. When the firm is in
equilibrium (that is, maximizing its economic profit), its total cost is the area of
rectangle:
Answer 0PDJ.
135. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. When the firm is in
equilibrium (that is, maximizing its economic profit), its total revenue is the area of
rectangle:
Answer SPDB.
136. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. When the firm is in
equilibrium (that is, maximizing its economic profit), its profit is the area of
rectangle:
0PDJ.
137. Multiple Choice: Figure: Monopoly Model Reference: Ref…
Question
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Figure: Monopoly Model
Reference: Ref 13-6
(Figure: Monopoly Model) Look at the figure Monopoly Model. When the firm is in
equilibrium (that is, maximizing its economic profit), its total cost is the area of
rectangle ________ and its total revenue is the area of rectangle ________.
Answer 0PDJ; SPDB
138. Multiple Choice: Suppose GoSports pennant monopoly is …
Question Suppose GoSports pennant monopoly is broken up and the pennant industry
becomes perfectly competitive. We would expect the ________ to increase from
the breakup and ________ to decrease from the breakup.
Answer producer surplus; consumer surplus and total surplus
139. Multiple Choice: If the government allowed only one ai...
Question
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If the government allowed only one airline to serve the entire U.S. market, there
would be a ________ loss associated with ________ efficiency in the airline
industry.
Answer marginal; reduced
140. Multiple Choice: In contrast to perfect competition, a:
Question In contrast to perfect competition, a:
Answer monopoly produces more at a lower price.
141. Multiple Choice: In monopoly:
Question In monopoly:
consumers are confronted with a price that is lower than average total cost.
142. Multiple Choice: The pricing in monopoly prevents some...
Question The pricing in monopoly prevents some mutually beneficial trades. The value of
these unrealized mutually beneficial trades is called:
Answer sunk costs.
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143. Multiple Choice: Which of the following is true regard...
Question Which of the following is true regarding monopolies?
Answer Monopolies produce too much and charge too much from the standpoint of
efficiency.
144. Multiple Choice: Suppose a perfectly competitive marke...
Question Suppose a perfectly competitive market is suddenly transformed into one that
operates as a monopoly market. We would expect:
Answer price to rise, output to fall, consumer surplus to rise, producer surplus to rise,
and deadweight loss to fall.
145. Multiple Choice: Suppose a perfectly competitive indus…
Question Suppose a perfectly competitive industry is suddenly transformed into a monopoly
industry. We can assume that monopoly output will be ________ than the
competitive output and that ________.
Answer higher; deadweight loss will emerge
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146. Multiple Choice: In general, economists are critical o...
Question In general, economists are critical of monopoly where ________ exist(s).
persistent economies of scale
147. Multiple Choice: Public policies toward monopoly in th...
Question Public policies toward monopoly in the United States often consist of:
148. Multiple Choice: Amtrak is a publicly owned company th...
Question Amtrak is a publicly owned company that provides rail service. This means that
Amtrak’s prices tend to be ________ than if it were a private company, and the
quality of service tends to be ________ than if it were a private company.
149. Multiple Choice: In an industry characterized by exten...
Question In an industry characterized by extensive economies of scale:
Answer small companies are more profitable than large companies.
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150. Multiple Choice: A natural monopoly is one that:
Question A natural monopoly is one that:
Answer monopolizes a natural resource such as a mineral spring.
151. Multiple Choice: One government policy for dealing wit…
Question One government policy for dealing with a natural monopoly is to:
Answer impose a price floor to eliminate the deadweight loss.
152. Multiple Choice: Figure: Total Surplus with a Regulate…
Question Figure: Total Surplus with a Regulated Natural Monopolist
Reference: Ref 13-7
(Figure: Total Surplus with a Regulated Natural Monopoly) Look at the figure Total
Surplus with a Regulated Natural Monopolist. In the figure, the natural monopoly:
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Answer would incur an economic profit if regulated to produce where price is less than
marginal cost.
153. Multiple Choice: If the regulation of a monopoly resul...
Question If the regulation of a monopoly results in a price equal to marginal cost but the
price is below average total cost:
Answer the firm can still make an economic profit.
154. Multiple Choice: If a monopoly is forced to charge a p...
Question If a monopoly is forced to charge a price equal to marginal cost:
Answer output will fall.
155. Multiple Choice: Figure: Demand, Revenue, and Cost Cur…
Question
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Figure: Demand, Revenue, and Cost Curves
Reference: Ref 13-8
(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue,
and Cost Curves. The figure shows the demand, marginal revenue, marginal cost,
and average total cost curves for Figglenuts–R–Us, a monopolist in the figglenut
market. Figglenuts-R–Us will sell ________ figglenuts and set a price of ________
to maximize profits.
156. Multiple Choice: Figure: Demand, Revenue, and Cost Cur…
Question
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Figure: Demand, Revenue, and Cost Curves
Reference: Ref 13-8
(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue,
and Cost Curves. The figure shows the demand, marginal revenue, marginal cost,
and average total cost curves for Figglenuts–R–Us, a monopolist in the figglenut
market. If the government wanted to regulate Figglenuts–R–Us such that the entire
deadweight loss would be eliminated, it would impose a price ceiling of ________
in the market.
157. Multiple Choice: Figure: Demand, Revenue, and Cost Cur…
Question
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Figure: Demand, Revenue, and Cost Curves
Reference: Ref 13-8
(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue,
and Cost Curves. The figure shows the demand, marginal revenue, marginal cost,
and average total cost curves for Figglenuts–R–Us, a monopolist in the figglenut
market. If the government wanted to regulate Figglenuts–R–Us such that it would
minimize the deadweight loss while allowing the firm to break even, it would impose
a price ceiling of ________ in the market.
158. Multiple Choice: Figure: Demand, Revenue, and Cost Cur…
Question
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Figure: Demand, Revenue, and Cost Curves
Reference: Ref 13-8
(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue,
and Cost Curves. The figure shows the demand, marginal revenue, marginal cost,
and average total cost curves for Figglenuts–R–Us, a monopolist in the figglenut
market. If the government regulated the figglenut market by setting a price ceiling of
$40, Figglenuts–R–Us might:
159. Multiple Choice: The practice of charging different pr…
Question The practice of charging different prices to different customers for the same good or
service, even though the cost of supplying those customers is the same, is:
160. Multiple Choice: Price discrimination is the practice of:
Question Price discrimination is the practice of:
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