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Question;MULTIPLE CHOICE62) A price-discriminating monopoly;A) cannot offer discounts.;B) cannot control the price of its product.;C) sells a larger quantity than it would if it were a single-price monopoly.;D) is illegal.;E) makes a smaller economic profit than it would if it were a;single-price monopoly.;62);63) In the above figure, a perfectly competitive market will;have a price of ________ and a;single-price monopoly will have a price of;A)P1 and quantity ofQ1,P2 and quantity ofQ2;B)P2 and quantity ofQ2,P3 and quantity ofQ1;C)P2 and quantity ofQ1,P1 and quantity ofQ1;D)P2 and quantity ofQ2,P1 and quantity ofQ1;E)P3 and quantity ofQ3,P1 and quantity ofQ1;63);64) A single-price monopoly transfers;A) economic profit to the government.;B) consumer surplus to producers.;C) producer surplus to consumers.;D) economic profit to deadweight loss.;E) economic profit to consumers.;64);65) The figure above shows the demand curve, marginal revenue;curve, and marginal cost curve.;The amount of consumer surplus when the market has a monopoly;producer is;A)ace. B)bcef.;C)bcd. D)abf. E)acd.;65);66) The figure above shows the demand curve, marginal revenue;curve, and marginal cost curve.;The amount of consumer surplus when the market has a monopoly;producer is ________ and;the amount of consumer surplus when the market is perfectly;competitive is ________.;A)abf,aceB);ace,bcdC)ace;abfD)abf,bcdE);bcd,ace;66);67) Compared to a perfectly competitive market, a single-price monopoly sets;A) a higher price.;B) a lower price.;C) the same price.;D) a price that might be higher, lower, or the same depending;on whether the monopoly's;marginal revenue curve lies above, below, or on its demand;curve.;E) a price that might be higher, lower, or the same depending;on whether the monopoly's;marginal cost curve lies above, below, or on its marginal;revenue curve.;67);68) Compared to a perfectly competitive industry, a single-price monopoly produces;A) the same output.;B) more output.;C) less output.;D) some amount that might be more, less, or the same depending;on whether the monopoly's;marginal revenue curve lies above, below, or on its demand;curve.;E) some amount that might be more, less, or the same depending;on whether the monopoly's;marginal cost curve lies above, below, or on its marginal;revenue curve.;68);69) Mark owns a cattle ranch near Hugo, Oklahoma. Mark is;currently producing beef at an output;level where marginal revenue exceeds marginal cost. In order to;maximize his profit, Mark;should;A) decrease his output.;B) shut down his ranch.;C) increase his output.;D) not change his output.;E) probably change his output, but more information is needed;to determine if he should;increase, decrease, or not change it.;69);70) When compared to a perfectly competitive market, a single-price monopoly with the same costs;produces ________ output and charges ________ price.;A) a smaller, a lower;B) a larger, a lower;C) a smaller, a higher;D) a smaller, the same;E) the same, a higher;70);71) Suppose the Busy Bee Cafe?is the monopoly producer of hamburgers in;Hugo, Oklahoma. The;above figure represents the demand, marginal revenue, and;marginal cost curves for this;establishment. What quantity will the Busy Bee produce to;maximize its profit?;A) 20 hamburgers per hour;B) 50 hamburgers per hour;C) 10 hamburgers per hour;D) 0 hamburgers per hour.;E) 30 hamburgers per hour;71);Price(dollars) Quantity(units);6 1;5 2;4 3;3 4;2 5;1 6;72) The above table gives the demand schedule for a monopoly.;The demand is elastic at all prices;between;A) $3 and $1.;B) $5 and $1.;C) $4 and $3.;D) $6 and $1.;E) $6 and $4.;72);73) The above table gives the demand schedule for a monopoly.;The demand is inelastic over the;entire price range between;A) $6 and $4.;B) $6 and $1.;C) $3 and $1.;D) $4 and $3.;E) $5 and $1.;73);74) If the Boston Red Sox baseball team is currently charging a;ticket price where its demand is;inelastic, then the Red Sox's marginal revenue is;A) positive.;B) zero.;C) undefined.;D) maximized.;E) negative.;74);Quantity;(units);Price;(dollars per unit);1 8;2 7;3 6;4 5;5 4;6 3;75) The table above gives the demand for a monopolist's output.;What is the total revenue in when 3;units of output are produced?;A) $18 B) $20 C) $21 D) $6;75);76) The table above gives the demand for a monopolist's output.;What is the marginal revenue;when output is increased from 5 to 6 units?;A) $18 B)-$2 C) $4 D) $3;76);77) The demand curve facing a single-price;monopoly is;A) the same as only the marginal revenue curve.;B) the same as both the marginal revenue curve and the marginal;cost curve.;C) below the marginal revenue curve.;D) above the marginal revenue curve.;E) the same as only the marginal cost curve.;77);78) A single-price monopoly can sell 10 units of its;product at a price of $45 each but to sell 11 units;the monopoly must cut the price to $44. What is the marginal;revenue of the extra unit sold?;A) $484 B) $450 C) $34 D)-$1 E) $44;78);79) A single-price monopoly faces a linear demand;curve. If the marginal revenue for the second;unit is $20, then the marginal revenue for the;A) third unit is also $20.;B) third unit is less than $20.;C) first unit is less than $20.;D) third unit is more than $20.;E) more information is needed to determine if the marginal;revenue for the third unit is more;than, less than, or equal to $20.;79);80) For a single-price monopoly, price is;A) greater than marginal revenue.;B) equal to marginal revenue.;C) less than marginal revenue because the firm must lower its;price in order to sell another;unit of output.;D) less than marginal revenue because the firm cannot increase;its total revenue when the;demand curve is downward sloping.;E) equal to zero because the firm is not a price taker.;80);81) For a monopoly, marginal revenue is equal to;A) the price of the product.;B) the amount people buy between two prices.;C) the amount people buy at a given price.;D) the change in total revenue brought about by a one-unit increase in quantity sold.;E) the price multiplied by the quantity sold.;81);82) A single-price monopoly;A) is able to raise its price as high as it wants and consumers;must still buy from it because it;is a monopoly.;B) can lower its price for only a few select consumers if it;wants to increase its sales.;C) must practice price discrimination.;D) must lower the price for all customers if it wants to;increase its sales.;E) will set its price equal to a consumer's willingness to pay.;82);83) In order for a hotel to successfully price discriminate so;that senior citizens are given a discount;the hotel must be able to;A) lower its prices to younger customers too.;B) prevent senior citizens from reselling their rooms to;younger customers.;C) offset the economic loss from charging senior citizens a;lower price by lowering the;marginal cost of renting rooms to senior citizens.;D) shift its demand curve rightward.;E) determine if a senior citizen can pay a higher price.;83);84) A price-discriminating monopoly is a monopoly that;A) has a license to sell the product.;B) sells its output at a single price to all of its customers.;C) illegally charges different customers different prices for;the good it produces.;D) sells different units of a good or service at different;prices.;E) has control over the resources used to produce the product.;84);85) A single-price monopoly;A) sets a single price for all consumers.;B) asks each consumer what single price they would be willing;to pay.;C) sets a single, different price for each consumer.;D) sells each unit of its output for the single, highest price;that the buyer of that unit is;willing to pay.;E) sets a single, different price for each of two different;groups.;85);86) Which of the following statements is correct?;A) Because a monopoly is the only firm in the market, its;marginal revenue curve must be the;same as the market demand curve.;B) Monopolies are guaranteed to earn an economic profit.;C) The market demand and the firm's demand are the same for a;monopoly.;D) Monopolies have perfectly inelastic demand for the product;sold.;E) Because a monopoly is the only firm in the market, its;supply curve is the same as the;market demand curve.;86);87) Patents;A) remove legal barriers to entry.;B) are prohibited in the United States.;C) are a legal barrier to entry.;D) decrease the incentive to innovate.;E) create economies of scale.;87);88) A natural monopoly's average cost curve;i. intersects the demand curve while the average cost curve;slopes downward.;ii. reaches its minimum before it intersects the demand curve.;iii. intersects the demand curve below the intersection of the;marginal cost curve and the;demand curve.;A) i, ii, and iii.;B) ii only.;C) i and iii.;D) iii only.;E) i only.;88);89) For a natural monopoly, economies of scale;A) as well as constant returns to scale and diseconomies of;scale exist along the long-run;average cost curve at least until it crosses the market demand;curve..;B) are totally absent.;C) and diseconomies of scale exist along the long-run average cost curve at least until it;crosses the market demand curve.;D) lead to a legal barrier to entry.;E) exist along the long-run average;cost curve at least until it crosses the market demand;curve.;89);90) A natural monopoly;A) occurs when one firm controls a natural resource.;B) arises when one firm can meet the entire market demand at a;lower average total cost than;two or more firms.;C) arises as a result of legal barriers to entry.;D) Both answers A and B are correct.;E) Both answers A and C are correct.;90);91) A natural barrier to entry is defined as a barrier that;arises because of;A) technology that allows economies of scale over the entire;relevant range of output.;B) patents or licenses that exclude others from producing a;good or service.;C) many firms producing the good and thereby allowing choice;for all consumers.;D) one firm owning a key natural resource.;E) anticompetitive practices by a firm that keep other firms;from producing.;91);92) A monopoly;A) must determine the price it will charge.;B) cannot price discriminate because such a pricing strategy is;illegal in the United States.;C) faces extensive competition from firms making close;substitutes.;D) has no control over the price it must charge.;E) Both answers B and C are correct.;92)

 

Paper#57928 | Written in 18-Jul-2015

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