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.   price discrimination.
D.   benevolent pricing.
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.   All of the choices are correct
B.   her output where MC = MR.
C.   her product's price where MC = MR.
D.   None of the choices are correct
Question #4
The marginal revenue curve for a monopolist is
A.   generally below the average cost curve.
B.   always above the average revenue curve.
C.   always below the demand curve.
D.   always above the demand curve.
Question #5
Which of the following is not potentially a barrier to entry into the widget market?
A.   high prices for widgets
B.   massive advertising by existing widget producers
C.   government licensing of widget producers
D.   patent protection on the design of widgets
Question #6
The key element in preserving a monopoly is
A.   increased advertising expenditure.
B.   government subsidy of critical enterprises.
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.   searcher.
C.   follower.
D.   taker.
Question #8
Compared to a perfectly competitive firm, a monopolist
A.   will, according to Schumpeter, invest fewer resources in research and development.
B.   is less likely to face government regulation.
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.   The industry demand curve is downward sloping.
B.   Profit is maximized where MR = MC.
C.   The firm and the industry are exactly the same entity.
D.   Positive economic profits may be earned in the short run.
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.   large sunk costs.
B.   legal restriction.
C.   "patent power."
D.   control of scarce resources.
Question #12
To be a natural monopoly, a firm must
A.   control an essential natural resource input.
B.   be very large.
C.   have falling average costs over a substantial range of total market demand.
D.   have a continuously falling average cost curve as output rises.
Question #13
The demand curve facing a monopolist is
A.   horizontal at the market price.
B.   perfectly inelastic at the market price.
C.   exactly twice as steep as the market demand curve for the good.
D.   identical to the market demand curve for the good.

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