Econ 101 - Microeconomics » Fall 2022 » Monopoly Ch 8 quiz

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Question #1
Providing medical services for smaller fees to the poor than to the rich is
A.   benevolent pricing.
B.   social pricing.
C.   misplaced charity.
D.   price discrimination.
Question #2
Pure monopoly is defined as a
A.   one-firm industry.
B.   market structure in which there are many substitute products.
C.   market structure created by special government sanctions.
D.   market structure maintained by entry of many rival firms.
Question #3
A profit-maximizing monopolist sets
A.   her product's price where MC = MR.
B.   All of the choices are correct
C.   None of the choices are correct
D.   her output where MC = MR.
Question #4
The marginal revenue curve for a monopolist is
A.   always above the average revenue curve.
B.   generally below the average cost curve.
C.   always above the demand curve.
D.   always below the demand curve.
Question #5
Which of the following is not potentially a barrier to entry into the widget market?
A.   government licensing of widget producers
B.   massive advertising by existing widget producers
C.   high prices for widgets
D.   patent protection on the design of widgets
Question #6
The key element in preserving a monopoly is
A.   increased advertising expenditure.
B.   guaranteeing availability of substitute products.
C.   government subsidy of critical enterprises.
D.   keeping potential rivals out of the market.
Question #7
A monopolist is best described as a price
A.   maker.
B.   taker.
C.   searcher.
D.   follower.
Question #8
Compared to a perfectly competitive firm, a monopolist
A.   usually produces an inefficiently small level of output.
B.   is less likely to face government regulation.
C.   will, according to Schumpeter, invest fewer resources in research and development.
D.   is less likely to advertise.
Question #9
What is true for monopoly that is not true for perfect competition?
A.   Positive economic profits may be earned in the short run.
B.   The industry demand curve is downward sloping.
C.   Profit is maximized where MR = MC.
D.   The firm and the industry are exactly the same entity.
Question #10
A monopolist can sell 10 wangdoodles if he charges $10 per wangdoodle and 11 wangdoodles if he charges $9. The MR from selling the 11th wangdoodle is
A.   -$1.
B.   $9.
C.   $1.
D.   $99.
Question #11
The South African diamond production monopoly is an example of monopoly through
A.   "patent power."
B.   control of scarce resources.
C.   large sunk costs.
D.   legal restriction.
Question #12
To be a natural monopoly, a firm must
A.   have falling average costs over a substantial range of total market demand.
B.   be very large.
C.   have a continuously falling average cost curve as output rises.
D.   control an essential natural resource input.
Question #13
The demand curve facing a monopolist is
A.   horizontal at the market price.
B.   identical to the market demand curve for the good.
C.   perfectly inelastic at the market price.
D.   exactly twice as steep as the market demand curve for the good.

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