Filters
Question type
Study Flashcards

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the average revenue when Sally sells 7 pairs of shoes? A) $40 B) $90 C) $100 D) $700 -Refer to Table 15-7. What is the average revenue when Sally sells 7 pairs of shoes?


A) $40
B) $90
C) $100
D) $700

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

Correct Answer

verifed

verified

​The best option to control the behavior of a natural monopoly is to use public ownership of the monopoly.

A) True
B) False

Correct Answer

verifed

verified

Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are


A) less of a concern for a monopoly than competitive market.
B) offset by the higher profits earned by a monopolist.
C) a function of the reduction in the quantity produced by a monopolist in comparison to a competitive market.
D) All of the above are correct.

E) B) and D)
F) A) and D)

Correct Answer

verifed

verified

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


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.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

One solution to the problems of marginal-cost pricing of a regulated natural monopolist is average cost pricing. In this model, the monopolist is allowed to price its production at average total cost. How does average-cost pricing differ from marginal-cost pricing? Does this solution maximize social well-being?

Correct Answer

verifed

verified

Under average-cost pricing, the monopoli...

View Answer

The fundamental cause of monopolies is barriers to entry.

A) True
B) False

Correct Answer

verifed

verified

For a monopolist, marginal revenue is


A) equal to price, as it is for a perfectly competitive firm.
B) less than price, as it is for a perfectly competitive firm.
C) equal to price, whereas marginal revenue is less than price for a perfectly competitive firm.
D) less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.

E) All of the above
F) A) and C)

Correct Answer

verifed

verified

Comparing firms in perfectly competitive markets to monopoly firms, which produces more output?

Correct Answer

verifed

verified

perfectly ...

View Answer

Figure 15-17 Figure 15-17 -Refer to Figure 15-17. Which of the following areas represents the consumer surplus from this profit-maximizing monopolist? A) ABE B) BCFE C) EFG D) ACG -Refer to Figure 15-17. Which of the following areas represents the consumer surplus from this profit-maximizing monopolist?


A) ABE
B) BCFE
C) EFG
D) ACG

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Table 15-3 Consider the following demand and cost information for a monopoly. Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3. The marginal cost of the 4th unit is A) $7. B) $12. C) $25. D) $60. -Refer to Table 15-3. The marginal cost of the 4th unit is


A) $7.
B) $12.
C) $25.
D) $60.

E) B) and D)
F) None of the above

Correct Answer

verifed

verified

Figure 15-3 Figure 15-3 -Refer to Figure 15-3. Use the letters in the figure to identify the area of deadweight loss for the single price monopolist. -Refer to Figure 15-3. Use the letters in the figure to identify the area of deadweight loss for the single price monopolist.

Correct Answer

verifed

verified

Scenario 15-9 Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000. -Refer to Scenario 15-9. How much additional profit will the museum earn if it engages in price discrimination compared to charging each customer $8 for admission?


A) $0
B) $200
C) $400
D) $800

E) B) and D)
F) A) and D)

Correct Answer

verifed

verified

Many economists criticize monopolists because they


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 D)
F) B) and C)

Correct Answer

verifed

verified

​Suppose that a market that is a natural monopoly has three producers providing the good to this market. This situation will


A) ​result in lower prices for consumers under all circumstances.
B) ​result in higher average costs for each producer than if there were only a single producer.
C) ​result in all firms taking full advantage of economies of scale in the production of the good.
D) result in a more efficient outcome than the market with fewer producers.

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

If a profit-maximizing monopolist faces a downward-sloping market demand curve, its


A) average revenue is less than the price of the product.
B) average revenue is less than marginal revenue.
C) marginal revenue is less than the price of the product.
D) marginal revenue is greater than the price of the product.

E) A) and C)
F) A) and D)

Correct Answer

verifed

verified

Scenario 15-1 Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Scenario 15-1 Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day. -Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18? Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day. -Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18?

Correct Answer

verifed

verified

Figure 15-18 Figure 15-18 -Refer to Figure 15-18. If there are no fixed costs of production, monopoly profit without price discrimination equals A) $0. B) $1,000. C) $2,000. D) $4,000. -Refer to Figure 15-18. If there are no fixed costs of production, monopoly profit without price discrimination equals


A) $0.
B) $1,000.
C) $2,000.
D) $4,000.

E) None of the above
F) A) and C)

Correct Answer

verifed

verified

When a monopolist is able to sell its product at different prices, it is engaging in


A) distribution pricing.
B) quality-adjusted pricing.
C) arbitrage.
D) price discrimination.

E) B) and C)
F) None of the above

Correct Answer

verifed

verified

How does a competitive market compare to a monopoly that engages in perfect price discrimination?


A) In both cases, total social welfare is the same.
B) Total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly.
C) In both cases, some potentially mutually beneficial trades do not occur.
D) Consumer surplus is the same in both cases.

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

Correct Answer

verifed

verified

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?


A) antitrust laws
B) price discrimination
C) doing nothing
D) breaking up a natural monopoly into more than one firm

E) A) and C)
F) B) and D)

Correct Answer

verifed

verified

Showing 21 - 40 of 662

Related Exams

Exam 1

Ten Principles of Economics

455 Questions

Exam 2

Thinking Like an Economist

645 Questions

Exam 3

Interdependence and the Gains From Trade

550 Questions

Exam 4

The Market Forces of Supply and Demand

693 Questions

Exam 5

Elasticity and Its Application

625 Questions

Exam 6

Supply, Demand, and Government Policies

671 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets

547 Questions

Exam 8

Application: The Costs of Taxation

507 Questions

Exam 9

Application: International Trade

521 Questions

Exam 10

Externalities

543 Questions

Exam 11

Public Goods and Common Resources

453 Questions

Exam 12

The Design of the Tax System

563 Questions

Exam 13

The Costs of Production

649 Questions

Exam 14

Firms in Competitive Markets

608 Questions

Exam 16

Monopolistic Competition

649 Questions

Exam 17

Oligopoly

522 Questions

Exam 18

The Markets for the Factors of Production

592 Questions

Exam 19

Earnings and Discrimination

511 Questions

Exam 20

Income Inequality and Poverty

478 Questions

Exam 21

The Theory of Consumer Choice

568 Questions

Exam 22

Frontiers in Microeconomics

461 Questions

Show Answer