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.   misplaced charity.
B.   social pricing.
C.   benevolent pricing.
D.   price discrimination.
Question #2
Pure monopoly is defined as a
A.   market structure created by special government sanctions.
B.   market structure maintained by entry of many rival firms.
C.   market structure in which there are many substitute products.
D.   one-firm industry.
Question #3
A profit-maximizing monopolist sets
A.   her output where MC = MR.
B.   her product's price where MC = MR.
C.   None of the choices are correct
D.   All of the choices are correct
Question #4
The marginal revenue curve for a monopolist is
A.   always above the demand curve.
B.   always above the average revenue curve.
C.   generally below the average cost 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.   patent protection on the design of widgets
D.   high prices for widgets
Question #6
The key element in preserving a monopoly is
A.   government subsidy of critical enterprises.
B.   increased advertising expenditure.
C.   keeping potential rivals out of the market.
D.   guaranteeing availability of substitute products.
Question #7
A monopolist is best described as a price
A.   maker.
B.   follower.
C.   searcher.
D.   taker.
Question #8
Compared to a perfectly competitive firm, a monopolist
A.   is less likely to face government regulation.
B.   will, according to Schumpeter, invest fewer resources in research and development.
C.   usually produces an inefficiently small level of output.
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 firm and the industry are exactly the same entity.
C.   The industry demand curve is downward sloping.
D.   Profit is maximized where MR = MC.
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.   -$1.
C.   $99.
D.   $9.
Question #11
The South African diamond production monopoly is an example of monopoly through
A.   control of scarce resources.
B.   large sunk costs.
C.   "patent power."
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.   have a continuously falling average cost curve as output rises.
C.   control an essential natural resource input.
D.   be very large.
Question #13
The demand curve facing a monopolist is
A.   perfectly inelastic at the market price.
B.   horizontal at the market price.
C.   identical to the market demand curve for the good.
D.   exactly twice as steep as the market demand curve for the good.

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