Question 1

At high price levels,demand tends to be ________ and the price effect is ________,relative to the output effect.

Accepted Answer

A)   inelastic; small
B)   inelastic; large
C)   elastic; small
D)   elastic; large
E)   inelastic; insignificant

Question 2

At low price levels,demand tends to be ________ and the price effect is ________,relative to the output effect.

Accepted Answer

A)   inelastic; small
B)   inelastic; large
C)   elastic; small
D)   elastic; large
E)   elastic; insignificant

Question 3

The output effect refers to how

Accepted Answer

A)   lower prices affect the quantity sold.
B)   firms can set their prices.
C)   firms choose their quantities.
D)   lower prices affect revenue.
E)   lower output affects the price.

Question 4

Refer to the accompanying figure to answer the following questions. 
-The profit-maximizing price and quantity are ________,respectively.

Accepted Answer

A)   $25 and 1,000
B)   $40 and 1,500
C)   $45 and 1,500
D)   $50 and 1,000
E)   $70 and 1,000

Question 5

A privately owned firm that is regulated by the government is very similar to a firm that the government owns because

Accepted Answer

A)   both make economic profits.
B)   neither has a profit motive.
C)   both minimize costs.
D)   both result in no deadweight loss.
E)   neither earn economic profits.

Question 6

One way the government can restore competitiveness in a market is through

Accepted Answer

A)   patents.
B)   copyrights.
C)   tariffs.
D)   taxes.
E)   antitrust laws.

Question 7

Refer to the accompanying figure to answer the following questions. 
-When a competitive market comes under the control of a monopoly,the quantity changes from

Accepted Answer

A)   D to E.
B)   E to D.
C)   C to A.
D)   B to A.
E)   A to B.

Question 8

The marginal revenue lies ________ the demand curve because there is a(n) ________ effect whenever the price is lowered.

Accepted Answer

A)   above; price
B)   below; price
C)   below; output
D)   above; output
E)   on; price

Question 9

Most economists are against monopolies because

Accepted Answer

A)   monopolists do not maximize profits.
B)   monopolies produce too much of a product.
C)   monopolies offer consumers more choices than they need.
D)   monopolies can never produce the quantity that a perfectly competitive market would produce.
E)   monopolies offer less choice to consumers.

Question 10

When a town has a single cable provider

Accepted Answer

A)   the cable company usually offers many different cable packages to satisfy customers' wants.
B)   customers must buy some cable channels they don't want in order to get the channels they do want.
C)   the government regulates the cable provider's offerings.
D)   the cable provider is a price taker.
E)   the consumers experience no consumer surplus.

Question 11

Three natural barriers to entry are

Accepted Answer

A)   control of resources,patents and copyright law,and licensing.
B)   economies of scale,problems raising capital,and control of resources.
C)   problems raising capital,patents and copyright law,and licensing.
D)   control of resources,patents and copyright law,and economies of scale.
E)   control of resources,economies of scale,and licensing.

Question 12

Answer the following questions based on the accompanying graph.
  
a.What is the change in revenues associated with the price effect for this firm when the price decreases from $50 to $30?
b.What is the change in revenues associated with the output effect for this firm when the price decreases from $50 to $30?
c.Would the firm gain revenue if it lowered the price from $50 to $30? Explain.

Accepted Answer

a.The price effect refers to how lower p...

Question 13

Market-created and government-created barriers

Accepted Answer

A)   are the same thing.
B)   are regarded by all economists as bad.
C)   increase competition in markets.
D)   create monopolies.
E)   are problems solved only by government intervention.

Question 14

Control of resources is an example of

Accepted Answer

A)   an externality.
B)   consumer surplus.
C)   a government-created barrier.
D)   a natural barrier.
E)   rent seeking.

Question 15

Problems raising capital is an example of

Accepted Answer

A)   a natural barrier.
B)   consumer surplus.
C)   a government-created barrier.
D)   an externality.
E)   inefficient output and price.

Question 16

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Accepted Answer

A)   the city instituted price caps as part of an effort to regulate the monopoly.
B)   New Yorkers have turned to walking and bicycling as ways to get around.
C)   ridesharing services like Uber have made the medallions less valuable.
D)   the city greatly increased the number of medallions by selling new ones.
E)   passenger-on-driver crime has made taxi driving a less desirable line of work.

Question 17

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> In a competitive market,the quantity pr...

Question 18

Control of resources,problems raising capital,and economies of scale are all examples of

Accepted Answer

A)   government-created barriers.
B)   market structures.
C)   patents and copyright laws.
D)   price makers.
E)   natural barriers.

Question 19

Refer to the accompanying figure to answer the following questions. 
-Which price and quantity combination is undesirable for both the monopolist firm and society?

Accepted Answer

A)   A and E
B)   B and F
C)   C and G
D)   D and H
E)   A and H

Question 20

Which provision in the U.S.Constitution blocks the erection of trade barriers between neighboring states?

Accepted Answer

A)   "No State shall,without the consent of Congress,lay any imposts or duties on imports or exports."
B)   "...nor shall private property be taken for public use,without just compensation."
C)   "The Congress shall have power to lay and collect taxes,duties,imposts and excises."
D)   "The judicial power of the United States shall not ...extend to any suit in law or equity,commenced or prosecuted against one of the United States by citizens of another state."
E)   "The powers not delegated to the United States by the Constitution ...are reserved to the States respectively."

Exam 10: Understanding Monopoly

Refer to the accompanying figure to answer the following questions. -Which price and quantity combination is undesirable for both the monopolist firm and society?

Correct Answer
verified

At high price levels,demand tends to be and the price effect is ,relative to the output effect.

Correct Answer
verified

When a town has a single cable provider

Correct Answer
verified

Refer to the accompanying figure to answer the following questions. -The profit-maximizing price and quantity are ________,respectively.

Correct Answer
verified

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Correct Answer
verified

Control of resources is an example of

Correct Answer
verified

Refer to the accompanying figure to answer the following questions. -When a competitive market comes under the control of a monopoly,the quantity changes from

Correct Answer
verified

Most economists are against monopolies because

Correct Answer
verified

The marginal revenue lies the demand curve because there is a(n) effect whenever the price is lowered.

Correct Answer
verified

Problems raising capital is an example of

Correct Answer
verified

One way the government can restore competitiveness in a market is through

Correct Answer
verified

Control of resources,problems raising capital,and economies of scale are all examples of

Correct Answer
verified

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

Correct Answer
verified
In a competitive market,the quantity pr...
View Answer

Three natural barriers to entry are

Correct Answer
verified

Which provision in the U.S.Constitution blocks the erection of trade barriers between neighboring states?

Correct Answer
verified

Market-created and government-created barriers

Correct Answer
verified

At low price levels,demand tends to be and the price effect is ,relative to the output effect.

Correct Answer
verified

Correct Answer
verified
a.The price effect refers to how lower p...
View Answer

The output effect refers to how

Correct Answer
verified

A privately owned firm that is regulated by the government is very similar to a firm that the government owns because

Correct Answer
verified

Exam 10: Understanding Monopoly

Refer to the accompanying figure to answer the following questions. -Which price and quantity combination is undesirable for both the monopolist firm and society?

Correct AnswerverifiedShow Answer

At high price levels,demand tends to be ________ and the price effect is ________,relative to the output effect.

Correct AnswerverifiedShow Answer

When a town has a single cable provider

Correct AnswerverifiedShow Answer

Refer to the accompanying figure to answer the following questions. -The profit-maximizing price and quantity are ________,respectively.

Correct AnswerverifiedShow Answer

The market price for a New York City taxi medallion is less today than it was in 2013.This is because

Correct AnswerverifiedShow Answer

Control of resources is an example of

Correct AnswerverifiedShow Answer

Refer to the accompanying figure to answer the following questions. -When a competitive market comes under the control of a monopoly,the quantity changes from

Correct AnswerverifiedShow Answer

Most economists are against monopolies because

Correct AnswerverifiedShow Answer

The marginal revenue lies ________ the demand curve because there is a(n) ________ effect whenever the price is lowered.

Correct AnswerverifiedShow Answer

Problems raising capital is an example of

Correct AnswerverifiedShow Answer

One way the government can restore competitiveness in a market is through

Correct AnswerverifiedShow Answer

Control of resources,problems raising capital,and economies of scale are all examples of

Correct AnswerverifiedShow Answer

Draw a figure to illustrate how the emergence of a monopoly leads to deadweight loss for society as a whole,and explain the circumstances that fix the amount of that deadweight.

Correct Answerverified In a competitive market,the quantity pr...View AnswerShow Answer

Three natural barriers to entry are

Correct AnswerverifiedShow Answer

Which provision in the U.S.Constitution blocks the erection of trade barriers between neighboring states?

Correct AnswerverifiedShow Answer

Market-created and government-created barriers

Correct AnswerverifiedShow Answer

At low price levels,demand tends to be ________ and the price effect is ________,relative to the output effect.

Correct AnswerverifiedShow Answer

Correct Answerverifieda.The price effect refers to how lower p...View AnswerShow Answer

The output effect refers to how

Correct AnswerverifiedShow Answer

A privately owned firm that is regulated by the government is very similar to a firm that the government owns because

Correct AnswerverifiedShow Answer

Correct Answer
verified

At high price levels,demand tends to be and the price effect is ,relative to the output effect.

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

The marginal revenue lies the demand curve because there is a(n) effect whenever the price is lowered.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In a competitive market,the quantity pr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

At low price levels,demand tends to be and the price effect is ,relative to the output effect.

Correct Answer
verified

Correct Answer
verified
a.The price effect refers to how lower p...
View Answer

Correct Answer
verified

Correct Answer
verified