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.   market structure created by special government sanctions.
B.   market structure in which there are many substitute products.
C.   market structure maintained by entry of many rival firms.
D.   one-firm industry.
Question #3
A profit-maximizing monopolist sets
A.   her product's price where MC = MR.
B.   her output 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.   generally below the average cost curve.
B.   always below the demand curve.
C.   always above the demand curve.
D.   always above the average revenue curve.
Question #5
Which of the following is not potentially a barrier to entry into the widget market?
A.   massive advertising by existing widget producers
B.   high prices for widgets
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.   keeping potential rivals out of the market.
C.   government subsidy of critical enterprises.
D.   guaranteeing availability of substitute products.
Question #7
A monopolist is best described as a price
A.   taker.
B.   maker.
C.   follower.
D.   searcher.
Question #8
Compared to a perfectly competitive firm, a monopolist
A.   is less likely to advertise.
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 face government regulation.
Question #9
What is true for monopoly that is not true for perfect competition?
A.   Profit is maximized where MR = MC.
B.   Positive economic profits may be earned in the short run.
C.   The firm and the industry are exactly the same entity.
D.   The industry demand curve is downward sloping.
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.   control of scarce resources.
B.   legal restriction.
C.   large sunk costs.
D.   "patent power."
Question #12
To be a natural monopoly, a firm must
A.   be very large.
B.   control an essential natural resource input.
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.   identical to the market demand curve for the good.
C.   exactly twice as steep as the market demand curve for the good.
D.   perfectly inelastic at the market price.

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