Question 1

The regulation of natural monopolies:

Accepted Answer

A)  typically takes the form of setting a maximum price that can be charged.
B)  always causes the industry to operate at a loss.
C)  eliminates deadweight loss.
D)  is common in the tobacco industry.E) A) and D)
F) A) and B)

Question 2

A monopoly is:

Accepted Answer

A)  a firm that is the sole producer of a good or service with no close substitutes.
B)  a firm that is the sole producer of a good or service with many close substitutes.
C)  a firm that is the producer of a good or service with just a few large competitors.
D)  a firm that produces a good or service that is identical to many others sold in the market.E) B) and D)
F) C) and D)

Question 3

An example of a public policy response to a monopoly is:

Accepted Answer

A)  antitrust laws.
B)  public ownership.
C)  do nothing.
D)  All of these are examples.E) C) and D)
F) A) and B)

Question 4

For a monopolist,total revenues:

Accepted Answer

A)  increase and then decrease as output increases.
B)  decrease and then increase as output increases.
C)  increase as output increases.
D)  decrease as output increases.E) None of the above
F) B) and C)

Question 5

Natural monopolies are the natural result of:

Accepted Answer

A)  competition in markets in which economies of scale exist over the relevant range of output.
B)  geographical happenstance.
C)  fierce tactics.
D)  government regulations intended to encourage competition.E) A) and B)
F) C) and D)

Question 6

The presence of a monopoly:

Accepted Answer

A)  hurts consumers.
B)  hurts society overall.
C)  helps producers.
D)  All of these statements are true.E) B) and D)
F) A) and D)

Question 7

The monopolist's outcome happens at a:

Accepted Answer

A)  lower price than the perfectly competitive one.
B)  higher price than the perfectly competitive one.
C)  higher quantity than the perfectly competitive one.
D)  None of these statements is true.E) None of the above
F) All of the above

Question 8

In general,with a monopolist's outcome:

Accepted Answer

A)  consumers lose surplus.
B)  monopolies earn profit.
C)  deadweight loss occurs.
D)  All of these statements are true.E) None of the above
F) B) and D)

Question 9

When a monopolist chooses the level of output where marginal cost equals marginal revenue:

Accepted Answer

A)  profits are maximized.
B)  price is set at marginal revenue.
C)  price is equal to average total costs.
D)  All of these statements are true.E) B) and C)
F) C) and D)

Question 10

Two antitrust acts actively used by the U.S.government to prevent monopoly power in markets are the ______________ and the ___________________.

Accepted Answer

A)  Sherman Antitrust Act;Clayton Act
B)  Bergman Antitrust Act;Clayton Act
C)  Sherman Antitrust Act;Stapleton Act
D)  Bergman Antitrust Act;Stapleton ActE) B) and D)
F) All of the above

Question 11

The public policies designed to mitigate the effects of monopolies:

Accepted Answer

A)  are highly controversial.
B)  are well-defined and accepted.
C)  are highly effective.
D)  are proven to increase benefits more than increase costs.E) None of the above
F) C) and D)

Question 12

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

Accepted Answer

A)  marginal cost is no longer equal to average variable cost.
B)  average total cost is now minimized where it crosses marginal cost.
C)  average total cost and average variable costs are now equal.
D)  The cost curves are the same for a firm regardless of market structure.E) A) and B)
F) A) and C)

Question 13

This table represents the revenues faced by a monopolist. 
Using the information in the table shown,if you were to graph the first two columns,you would have graphed which curve?

Accepted Answer

A)  Marginal revenue
B)  Market supply
C)  Market demand
D)  Total productivityE) C) and D)
F) B) and C)

Question 14

A monopoly:

Accepted Answer

A)  is constrained because its decisions cannot affect market price.
B)  is constrained by demand.
C)  faces a horizontal demand curve.
D)  is constantly threatened by the entry of new firms.E) B) and D)
F) None of the above

Question 15

An example of a public policy response to a monopoly is:

Accepted Answer

A)  public admonishment.
B)  encouraging mergers.
C)  antitrust laws.
D)  All of these are examples.E) A) and D)
F) None of the above

Question 16

A monopoly:

Accepted Answer

A)  has no competition at all.
B)  has just a few large competitors.
C)  has many competitors.
D)  Any of these could be true for a monopoly.E) A) and B)
F) All of the above

Question 17

For a monopoly,for all units greater than one,the marginal revenue curve:

Accepted Answer

A)  lies above the demand curve.
B)  lies below the average revenue curve.
C)  cannot be negative.
D)  All of these statements are true.E) A) and B)
F) A) and C)

Question 18

Protecting intellectual property rights:

Accepted Answer

A)  always benefits society.
B)  never benefits society.
C)  rarely affects society overall.
D)  is hotly debated whether it benefits or costs society overall.E) B) and C)
F) None of the above

Question 19

The government has used the Sherman Act to break up monopolies in which of the following industries?

Accepted Answer

A)  Tobacco
B)  Fishing
C)  Trucking
D)  All of these industries have been affected by the Sherman Act.E) None of the above
F) A) and B)

Question 20

In practice,placing a price control on a natural monopoly:

Accepted Answer

A)  is easy and commonly practiced.
B)  is difficult because of lack of information.
C)  often creates the same outcome as public ownership of the industry.
D)  is never a good idea.E) A) and B)
F) B) and C)

Exam 14: Monopoly

Two antitrust acts actively used by the U.S.government to prevent monopoly power in markets are the ______________ and the ___________________.

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The monopolist's outcome happens at a:

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

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A monopoly is:

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Protecting intellectual property rights:

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An example of a public policy response to a monopoly is:

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A monopoly:

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In general,with a monopolist's outcome:

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When a monopolist chooses the level of output where marginal cost equals marginal revenue:

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Natural monopolies are the natural result of:

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For a monopoly,for all units greater than one,the marginal revenue curve:

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For a monopolist,total revenues:

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The government has used the Sherman Act to break up monopolies in which of the following industries?

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The regulation of natural monopolies:

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In practice,placing a price control on a natural monopoly:

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An example of a public policy response to a monopoly is:

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The public policies designed to mitigate the effects of monopolies:

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The presence of a monopoly:

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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,if you were to graph the first two columns,you would have graphed which curve?

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Two antitrust acts actively used by the U.S.government to prevent monopoly power in markets are the and the _____.

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