Chapter 12_1: Regulation and the Antitrust Law

Chapter 12_1: Regulation and the Antitrust Law; Time: 40 phút

Question 1: Government can help eliminate all the following problems EXCEPT
a. underprovision of public goods.
b. economic inequality.
c. scarcity.
d. externalities.

Question 2: An externality can be a
a. marginal cost but not a total cost.
b. benefit but not a cost.
c. cost or a benefit.
d. cost but not a benefit.

Question 3: An externality is a cost or a benefit from an economic transaction that falls on
a. people who did not participate in the transaction.
b. consumers of the good but not producers.
c. producers of the good but not consumers.
d. both consumers and producers of the good.

Question 4: The external cost of a good
a. is the cost from a transaction imposed on people who did not participate in the transaction.
b. equals its total cost minus its consumer surplus.
c. equals its total cost minus its producer surplus.
d. equals its total cost minus its total surplus.

Question 5: The external benefit of a good
a. is the gain from a transaction falling on people who did not participate in the transaction.
b. equals its consumer surplus.
c. equals its total surplus.
d. equals its producer surplus.

Question 6: An example of an activity that generates an external cost is
a. planting flowers along an interstate highway.
b. dumping soapsuds into a trout stream.
c. eating an apple.
d. national defense services.

Question 7: An example of an externality occurs when a chemical factory
a. produces fertilizers that do not help plants grow.
b. overworks its employees.
c. produces fertilizers that kill plants rather than feed them.
d. dumps waste in a river upstream from a popular fishing spot.

Question 8: When people decorate the exteriors of their homes with colored lights, they create ________ for the motorists who pass by.
a. an external benefit
b. a competitive good
c. an excludable good
d. a public good

Question 9: Beautification of the national highways through the planting of shrubs and wildflowers will
a. benefit even people who do not help pay.
b. provide a flow of services that involve excludable consumption.
c. be profitable for a private landscaping company because they can charge passing drivers.
d. provide a flow of services that are rival in consumption.

Question 10: Market failures can result from
a. external benefits and external costs.
b. neither external benefits nor external costs.
c. external costs but not external benefits.
d. external benefits but not external costs.

Question 11: When a private market uses resources inefficiently, ________ exists.
a. market failure
b. resource failure
c. perfect competition
d. monopoly always

Question 12: The theory of public choice
a. explains the allocation of a good among free riders.
b. is the theory of the consumer marketplace.
c. is the theory of the political marketplace.
d. explains the allocation of private goods.

Question 13: The producers in the political marketplace are the
a. politicians.
b. voters.
c. bureaucrats.
d. None of the above because there are no producers in the political marketplace.

Question 14: A public choice theory of government behavior emphasizes that government acts
a. primarily to redistribute wealth from the rich to the poor.
b. in the long-run interest of voters.
c. as determined by voters, politicians, and bureaucrats interacting in a political marketplace.
d. to eliminate waste and achieve an efficient allocation of resources.

Question 15: Public choice theory explains that politicians
a. maximize their campaign contributions.
b. maximize the size of the deadweight loss.
c. eliminate waste and allocate resources in the social interest.
d. are the entrepreneurs in a political marketplace.

Question 16: According to economic models of public choice, the objective of politicians is to
a. maximize free-ridership.
b. get elected and remain in office.
c. promote the social interest.
d. maximize total public utility.

Question 17: Officials who are appointed to work in agencies are
a. free-riders.
b. bureaucrats.
c. politicians.
d. delegates.

Question 18: In economic models of public choice, ________ maximize their utility by ________.
a. politicians; accepting campaign contributions
b. bureaucrats; maximizing the budgets of their departments
c. politicians; debating government policies
d. voters; demanding a constant tax rate

Question 19: According to public choice theory, the larger a bureau's budget
a. the greater is the chance that lobbyists will not be successful.
b. the lower is the prestige of the bureau's director.
c. the greater is the prestige of the bureau's director.
d. the lower is the chance of mismanagement and waste.

Question 20: When all choices made by voters, politicians, and bureaucrats are compatible and no group can improve its position by making a different choice, there is a ________.
a. law-making marketplace
b. political equilibrium
c. government equilibrium
d. majority government

Question 21: When the choices of voters, politicians, and bureaucrats are compatible and no one group can improve its position by making a different choice, there is
a. a lobbying marketplace.
b. a political equilibrium.
c. an end to lobbying.
d. a political campaign.

Question 22: In political equilibrium
a. bureaucrats have no influence over policy.
b. no one group can improve its position by making a different choice.
c. politicians do not seek reelection.
d. no lobbying exists.

Question 23: Which of the following is a condition for political equilibrium?
a. Regulations have eliminated deadweight loss.
b. All involved parties are in agreement.
c. Interest groups will not use additional resources to press for additional changes.
d. Both answers B and C are correct.

Question 24: Which of the following is a characteristic of political equilibrium in the market for regulation?
a. Consumers demand more regulation than firms demand.
b. Some lobby groups try to change regulations that are already in place.
c. Everyone in the market will be in agreement.
d. Some lobby groups will increase the resources they devote to maintaining and expanding regulation.

Question 25: When no interest group wishes to spend more on influencing economic regulations and no politician offers different regulation,
a. corruption is eliminated.
b. regulations will be in oversupply.
c. regulations will be at their socially optimal level.
d. equilibrium is achieved in the market for economic regulation.






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Chapter 12_2: Regulation and the Antitrust Law

Chapter 12_2: Regulation and the Antitrust Law; Time: 40 phút

Question 1: When no interest group wishes to spend more on influencing economic regulation and no politician offers different regulations,
a. regulations will no longer be supplied.
b. regulations will no longer be demanded.
c. the economic regulation makes all groups better off.
d. everyone is not necessarily in agreement about the economic regulation.

Question 2: Regulation refers to
a. rules administered by a government agency.
b. the formation of monopolies.
c. the discipline of the marketplace.
d. cartelization of a competitive industry.

Question 3: Antitrust laws attempt to
a. establish minimum wages.
b. enforce fair trade laws.
c. prevent monopolies or collusion.
d. support prices.

Question 4: In part, an antitrust law
a. requires firms with profits to pay dividends.
b. provides for strict product liability.
c. prohibits monopolistic practices.
d. prohibits charging prices that customers think are too high.

Question 5: The main purpose of antitrust law is to
a. prohibit monopoly practices such as restricting output.
b. regulate the stock and bond markets.
c. encourage the formation of cartels.
d. regulate advertising.

Question 6: The main factors influencing the demand for regulation include all of the following EXCEPT the
a. number of buyers in the market.
b. producer surplus per firm.
c. number of government officials involved.
d. number of firms in the industry.

Question 7: For a given consumer surplus per buyer resulting from regulation, the demand for price regulation
a. increases more than proportionately to the number of buyers.
b. increases less than proportionately to the number of buyers.
c. decreases as the number of buyers increases.
d. increases proportionately to the number of buyers.

Question 8: The demand for regulation by buyers varies directly with the consumer
a. surplus per buyer created by the regulation and the number of buyers.
b. spending per buyer and the number of firms.
c. spending per buyer and the number of buyers.
d. surplus per buyer created by the regulation and the number of firms.

Question 9: The larger the consumer surplus gained per buyer from a regulation, the
a. more likely that the regulation will set the price at the competitive price.
b. greater is the demand for the regulation.
c. lower the price paid for the regulation.
d. lower the number of demanders for the regulation.

Question 10: Firms' demand for a particular regulation is tied directly to the
a. producer surplus per firm created by the regulation and the number of firms.
b. total revenue per firm and the number of buyers.
c. total revenue per firm and the number of firms.
d. producer surplus per firm created by the regulation and the number of buyers.

Question 11: Who supplies economic regulation?
a. competitive firms
b. politicians
c. monopolists
d. labor unions and heavy industry

Question 12: Politicians' supply of regulation is smaller when the
a. regulation benefits a small number of people but by a large amount per person.
b. regulation benefits a large number of people but by a small amount per person.
c. number of people affected by the regulation is large and each person has a large benefit.
d. consumer surplus per buyer or producer surplus per firm generated is large.

Question 13: The supply of economic regulation will increase when
a. there is a decrease in the benefit per buyer created by the regulation.
b. there is an increase in the benefit per buyer created by the regulation.
c. there is a small benefit spread over a large number of people.
d. there is a decrease in the benefit per seller created by the regulation.

Question 14: The social interest theory of regulation predicts that the
a. producer surplus will be maximized, whereas capture theory predicts that consumer surplus will be maximized.
b. consumer surplus will be maximized, whereas the capture theory predicts that producer surplus will be maximized.
c. deadweight loss is eliminated, whereas the capture theory predicts that consumer surplus will be maximized.
d. deadweight loss is eliminated, whereas the capture theory predicts that producer surplus will be maximized.

Question 15: The goal of regulators is to reduce deadweight loss, according to the
a. public choice theory of regulation.
b. rationally ignorant median voter theory.
c. social interest theory of regulation.
d. capture theory of regulation.

Question 16: The social interest theory of regulation assumes that
a. regulations promote the attainment of monopoly profit.
b. regulations promote the attainment of efficiency.
c. public officials seek their own gain through regulation.
d. regulators will seek to maximize consumer surplus.

Question 17: The social interest theory of regulation assumes that
a. public officials seek gain through regulation for only their own constituents.
b. regulations set price equal to average total revenue.
c. regulations maximize consumer surplus.
d. public officials seek to minimize deadweight loss.

Question 18: The social interest theory of regulation predicts that the political process will seek to minimize
a. total surplus.
b. consumer surplus.
c. deadweight loss.
d. producer surplus.

Question 19: The social interest theory of regulation assumes that
a. regulations favor voters over producers.
b. public officials favor consumers over producers.
c. public officials seek to keep their jobs.
d. regulations promote the attainment of competitive output.

Question 20: The capture theory of regulation implies that regulations maximize
a. producer surplus.
b. consumer surplus.
c. external surplus.
d. total surplus.

Question 21: The capture theory of regulation implies that
a. the demand for regulation is less elastic than the supply.
b. regulations promote the attainment of efficiency.
c. public officials favor voters over producers.
d. regulations promote the attainment of economic profit.

Question 22: According to the capture theory, as long as regulations do not decrease votes, they will
a. be imposed only when the benefits are received by disinterested parties.
b. not be imposed unless external costs are generated.
c. not be imposed if external costs result.
d. be imposed if they increase the surplus of small, easily identified groups.

Question 23: According to the capture theory, regulation occurs because a
a. large group of winners from regulation gains only a small amount per person.
b. small group of losers from regulation loses a great deal per person.
c. small group of winners from regulation gains a great deal per person.
d. deadweight loss escapes market disciplines.

Question 24: In many states, dentists who are licensed in other states cannot practice in the first state without passing a rigorous state exam. The regulation benefits dentists who are already practicing in the state. This requirement best illustrates
a. the effect of the Sherman Act.
b. the capture theory of regulation.
c. the effect of the Clayton Act.
d. the social interest theory of regulation.

Question 25: In some states, barbers and beauticians cannot care for hair without passing an examination testing such specialized knowledge as the location of the sphenoid bone and how to do finger waves. The regulation benefits barbers and beauticians who are already licensed. This requirement best illustrates
a. the capture theory of regulation.
b. the effect of the Sherman Act.
c. the social interest theory of regulation.
d. the effect of the Clayton Act.

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Chapter 11_1: Monopolistic Competition and Oligopoly

Chapter 11_1: Monopolistic Competition and Oligopoly; Time: 40 phút

Question 1: A monopolistically competitive firm has ________ power to set the price of its product because ________.
a. no; there are no barriers to entry
b. some; there are barriers to entry
c. some; of product differentiation
d. no; of product differentiation

Question 2: One difference between perfect competition and monopolistic competition is that
a. a perfectly competitive industry has fewer firms.
b. monopolistic competition has barriers to entry.
c. firms in monopolistic competition face a downward-sloping demand curve.
d. in perfect competition, firms produce slightly differentiated products.

Question 3: In monopolistically competitive industries,
a. firms are not sensitive to changes in consumer demand.
b. the amount of variety in products is the same as in perfectly competitive industries.
c. non-price competition through product differentiation is vigorous.
d. firms produce where marginal cost exceeds the marginal benefit to consumers.

Question 4: Firms in monopolistic competition make products that are
a. close but not perfect substitutes.
b. perfect substitutes.
c. close but not perfect complements.
d. perfect complements.

Question 5: A characteristic of monopolistic competition is
a. a low ratio of fixed to variable costs.
b. a high capital-output ratio.
c. product differentiation.
d. the absence of advertising.

Question 6: Product differentiation is a defining characteristic of
a. perfectly elastic demand.
b. perfect competition.
c. oligopoly.
d. monopolistic competition.

Question 7: A monopolistically competitive industry has
a. a small number of large firms.
b. differentiated products.
c. significant barriers to entry.
d. mutually dependent firms.

Question 8: Firms in monopolistic competition can achieve product differentiation by
a. exploiting economies of scale in production.
b. advertising special characteristics.
c. expanding plant size.
d. setting the price equal to average revenue.

Question 9: An example of a monopolistically competitive industry is
a. phone service.
b. the restaurant industry.
c. wheat farming.
d. the automobile industry.

Question 10: A characteristic of monopolistic competition is that each firm
a. faces perfectly elastic demand.
b. faces a downward-sloping demand curve.
c. has a perfectly inelastic supply.
d. has a perfectly elastic supply.

Question 11: In monopolistic competition, each firm has a demand curve with
a. a slope equal to zero, and there are barriers to entry into the market.
b. a negative slope, and there are no barriers to entry into the market.
c. negative slope, and there are barriers to entry into the market.
d. a slope equal to zero, and there is are no barriers to entry into the market.

Question 12: If an industry lacks barriers to entry and each of the many firm faces a demand curve with a negative slope, the industry is
a. monopolistically competitive.
b. a monopoly.
c. an oligopoly.
d. perfectly competitive.

Question 13: One important difference between monopoly and monopolistic competition is the
a. greater restriction of output in monopolistic competition.
b. point there are no barriers to entry in monopolistic competition.
c. point that the marginal revenue and demand curves are the same for a monopoly.
d. slope of the demand curve that the firms faces.

Question 14: In monopolistic competition, each firm's marginal revenue curve lies ________ its demand curve because of ________.
a. above; barriers to entry
b. below; product differentiation
c. below ; barriers to entry
d. above; product differentiation

Question 15: In monopolistic competition, each firm's marginal revenue curve has
a. a negative slope, and so does its demand curve.
b. a slope equal to zero, but its demand curve has a negative slope.
c. a slope equal to zero, and so does its demand curve.
d. a negative slope, but its demand curve has zero slope.

Question 16: A firm in monopolistic competition has some degree of price-setting power because
a. in the long run it earns a normal profit.
b. it must lower its price in order to sell a greater quantity.
c. the price it charges is never more than its marginal cost.
d. it can never earn less than normal profit.

Question 17: For a firm in monopolistic competition, the marginal cost curve intersects the average total cost curve
a. at no point.
b. at the minimum average total cost.
c. to the left of the minimum average total cost.
d. to the right of the minimum average total cost.

Question 18: Firms in monopolistic competition always will
a. produce at the minimum average total cost.
b. set their price equal to their marginal cost.
c. earn an economic profit.
d. set their price above their marginal cost.

Question 19: Firms in monopolistic competition have rivals that
a. set their prices according to the demand curves they face.
b. match their price decreases.
c. agree on a common price.
d. match their price increases.

Question 20: In the short run, a monopolistically competitive firm chooses
a. its quantity but not its price.
b. neither its price nor its quantity.
c. its price but not its quantity.
d. both its price and its quantity.

Question 21: In monopolistic competition, in the short run a firm maximizes its profit by selecting an output at which marginal cost equals
a. price.
b. marginal revenue.
c. zero.
d. average total cost.

Question 22: If a monopolistically competitive firm's marginal cost curve shifts upward, then its level of output
a. will decrease.
b. could increase, decrease, or stay the same but more information is needed.
c. will increase.
d. will stay the same.

Question 23: When firms in monopolistic competition incur an economic loss, some firms will
a. enter the industry, and demand will become more elastic for the original firms.
b. exit the industry, and demand will decrease for the firms that remain.
c. enter the industry and produce more products.
d. exit the industry, and demand will increase for the firms that remain.

Question 24: When firms in monopolistic competition are earning an economic profit, firms will
a. enter the industry, and demand will decrease for the original firms.
b. enter the industry, and demand will increase for the original firms.
c. exit the industry, and demand will increase for the firms that remain.
d. exit the industry, and demand will decrease for the firms that remain.

Question 25: If firms in a monopolistically competitive industry are earning an economic profit, then
a. some workers will leave the industry's labor force.
b. new firms will enter the industry.
c. some firms will leave the industry.
d. some customers will exit the market.




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Chapter 11_2: Monopolistic Competition and Oligopoly

Chapter 11_2: Monopolistic Competition and Oligopoly; Time: 40 phút

Question 1: In monopolistic competition, firms can earn an economic profit in
a. the short run but not in the long run.
b. the short run and in the long run.
c. the long run but not in the short run.
d. neither the long run nor the short run.

Question 2 - 9

Question 2: In the above figure, if the firm is in monopolistic competition, it will produce
a. 100 units.
b. 40 units.
c. 60 units.
d. between 60 and 80 units.

Question 3: In the above figure, if the firm is in monopolistic competition, its price will be
a. 2
b. 4
c. 3
d. 1

Question 4: In the above figure, the monopolistically competitive firm earns an economic profit of
a. between $50.01 and $100 per day.
b. greater than $100.01 per day.
c. 0
d. between $0 and $50 per day.

Question 5: The above figure is for a firm in monopolistic competition. The diagram represents the short run rather than the long run because
a. the MR curve cuts the ATC curve from below.
b. the firm is earning an economic profit.
c. the MR curve and the D curve do not coincide.
d. the firm is incurring an economic loss.

Question 6: The figure above shows a monopolistically competitive firm in the short run. During the transition to the long run, the demand curve will shift ________ and the MR curve will shift ________.
a. rightward; leftward
b. rightward; rightward
c. leftward; leftward
d. leftward; rightward

Question 7: If all firms in a monopolistically competitive industry faced the same demand and cost curves pictured in the above figure,
a. new firms will enter the industry.
b. they would produce 60 units in total.
c. their economic profit would be zero.
d. some firms will exit the industry.

Question 8: In the above figure, the firm is a monopolistically competitive firm. In the long run, its economic profit will be
a. between zero and $50 per day.
b. greater than $50.0 per day.
c. zero.
d. some amount that cannot be determined without more information.

Question 9: The figure above could represent the long-run equilibrium for a
a. firm facing inelastic demand at all outputs.
b. monopolistically competitive firm.
c. perfectly competitive firm.
d. monopoly.

Question 10 - 13

Question 10: In the figure above, assuming that the firm does not shut down, the firm will produce
a. 40 units.
b. 30 units.
c. fewer than 20 units.
d. 20 units.

Question 11: In the figure above, assuming that the firm does not shut down, it will charge a price of
a. 4
b. 3
c. 2
d. 1

Question 12: In the figure above, the firm's economic
a. profit will be between $0 and $30 per day.
b. loss will be greater than $30 per day.
c. profit will be greater than $30.01 per day.
d. loss will be $30 or less per day.

Question 13: The figure above shows a firm in monopolistic competition. If all firms in the industry have the demand and cost curves illustrated in the figure,
a. some firms will enter the industry in the long run.
b. some firms will exit the industry in the long run.
c. firms will neither enter nor exit the industry in the long run.
d. we cannot tell if firms will enter or exit the industry in the long run.

Question 14: If the market served by a monopolistically competitive industry expands, a likely result in the long run will be
a. a higher ratio of price to average cost.
b. a larger number of firms producing a similar product.
c. less elastic demand curves facing each firm.
d. a transition from monopolistic competition to oligopoly.

Question 15: In the long run, a firm in a monopolistically competitive industry produces where its marginal cost
a. equals its price.
b. is less than its average cost.
c. equals its average cost.
d. exceeds its average cost.

Question 16: In the long run, a firm in monopolistic competition produces where the slope of the average total cost curve is
a. zero.
b. equal to the marginal cost.
c. positive.
d. negative.

Question 17: In the long run, a monopolistically competitive firm can earn
a. no economic profit, and neither can a monopoly.
b. an economic profit, but a monopoly cannot.
c. no economic profit, but a monopoly might.
d. an economic profit, and so can a monopoly.

Question 18: In monopolistically competitive industries,
a. firms are not sensitive to changes in consumer demand.
b. entry and exit push economic profits toward zero.
c. firms produce where marginal cost equals the marginal benefit to the consumers.
d. there is no diversity of products.

Question 19: In long-run equilibrium, a firm in monopolistic competition earns
a. a normal profit.
b. an economic profit but the economic profit is less than it would be if the firm was a monopoly.
c. an economic profit that is higher than what it would be if the firm was a monopoly.
d. an economic profit that is the same amount as it would be if the firm was a monopoly.

Question 20: In the long run, a firm in monopolistic competition will
a. earn a positive economic profit.
b. earn a negative economic profit, that is, an economic loss.
c. earn zero economic profit, that is, a normal profit.
d. None of the above answers is necessarily correct because the amount of the profit or loss depends on the slope of the demand curve.

Question 21: In the long run, all firms in a monopolistically competitive industry earn
a. zero accounting profit.
b. an economic profit.
c. negative accounting profit.
d. zero economic profit.

Question 22: In monopolistic competition, in the long run customers pay a price that is
a. equal to both the minimum ATC and the minimum AVC.
b. less than the minimum ATC.
c. equal to the minimum ATC, but not equal to the minimum AVC.
d. more than the minimum ATC.

Question 23: In the long run, a monopolistically competitive firm's price equals its
a. marginal cost but not its average total cost.
b. average total cost and its marginal cost.
c. average total cost but not its marginal cost.
d. neither marginal cost nor its average total cost.

Question 24: In long-run equilibrium, a firm's price definitely equals its average total cost in both
a. perfect competition and monopolistic competition.
b. oligopoly and monopoly.
c. perfect competition and monopoly.
d. oligopoly and monopolistic competition.

Question 25: In the long run, a firm in a monopolistically competitive industry has its price equal to its
a. marginal cost.
b. marginal revenue.
c. elasticity of demand.
d. average total cost.





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Chapter 10_1: Monopoly

Chapter 10_1: Monopoly; Time: 40 phút

Question 1: Unregulated monopolies
a. cannot change the market quantity.
b. can influence the market quantity and price.
c. cannot incorporate.
d. take the market price as given.

Question 2: The following are key features of a monopoly EXCEPT
a. diseconomies of scale.
b. no close substitutes.
c. influence over price.
d. barriers to entry.

Question 3: Which of the following statements about a monopoly is FALSE?
a. A monopoly is the only supplier of the good.
b. Monopolies have no barriers to entry or exit.
c. The good produced by a monopoly has no close substitutes.
d. None of the above; that is, all of the above answers are true statements about a monopoly.

Question 4: Which of the following is LEAST likely to be a monopoly?
a. the sole owner of an occupational license
b. a pharmaceutical company with a patent on a drug
c. a store in a large shopping mall
d. the holder of a public franchise

Question 5: A public franchise is
a. an exclusive right granted to an inventor of a product.
b. a government issued license required to practice a profession.
c. a unique source of raw materials.
d. an exclusive right granted to a firm to supply a good or service.

Question 6: Public franchises create monopolies by restricting
a. entry.
b. demand.
c. prices.
d. profit.

Question 7: A patent grants
a. a guarantee of quality to consumers.
b. an exclusive right to an inventor of a product.
c. the right to practice a profession.
d. control over a unique source or supply of raw materials.

Question 8: Patents create monopolies by restricting
a. prices.
b. profit.
c. entry.
d. demand.

Question 9: Patents are ________ barriers to entry and public franchises are ________ barriers to entry.
a. legal; legal
b. legal; natural
c. natural; natural
d. natural; legal

Question 10: A defining characteristic of a natural monopoly is that
a. it exists because of legal barriers to entry.
b. it has no close substitutes.
c. its average total cost curve slopes downward as it intersects the demand curve.
d. its demand curve slopes downward.

Question 11: An industry in which one firm can supply the entire market at a lower price than two or more firms can is called a
a. legal monopoly.
b. single-price monopoly.
c. natural monopoly.
d. price-discriminating monopoly.

Question 12: Which of the following is true of a natural monopoly?
a. The firm can supply the entire market at a lower cost than could two or more firms.
b. Its average total cost curve slopes upward as it intersects the demand curve.
c. The firm is not protected by any barrier to entry.
d. Economies of scale exist to only a very low level of output.

Question 13: A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a
a. price-discriminating monopoly.
b. single-price monopoly.
c. natural monopoly.
d. legal monopoly.

Question 14: A single-price monopoly charges the same price
a. even if the demand curve shifts.
b. to all customers.
c. even if its cost curves shift.
d. and the price equals the firm's marginal revenue.

Question 15: All of the following are examples of price discrimination EXCEPT
a. lower ticket prices for matinee performances.
b. buy-one-get-one-free offers.
c. “early bird specials” at a restaurant.
d. “buy now, pay later” payment options.

Question 16: Total revenue equals
a. total cost minus profit.
b. price times quantity sold.
c. marginal revenue times quantity sold.
d. the area between the demand curve and the marginal revenue curve.

Question 17: For a monopoly, the industry demand curve is the firm's
a. profit function.
b. marginal revenue curve.
c. supply curve.
d. demand curve.

Question 18: Monopolists
a. face downward sloping demand curves.
b. are price takers.
c. have no short-run fixed costs.
d. maximize revenue, not profits.

Question 19: The marginal revenue curve for a single-price monopoly
a. lies below its demand curve.
b. is horizontal.
c. lies above its demand curve.
d. coincides with its demand curve.

Question 20: For a single-price monopoly, marginal revenue is ________ when demand is elastic and is ________ when demand is inelastic.
a. negative; positive
b. positive; positive
c. positive; negative
d. negative; negative

Question 21: If the price elasticity of demand is greater than 1, a monopoly's
a. marginal revenue is zero.
b. total revenue decreases when the firm lowers its price.
c. marginal revenue is negative.
d. total revenue increases when the firm lowers its price.

Question 22: If the price elasticity of demand is less than 1, a monopoly's
a. marginal revenue is undefined.
b. total revenue decreases when the firm lowers its price.
c. total revenue increases when the firm lowers its price.
d. marginal revenue is zero.

Question 23: If the demand for its product is elastic, a monopoly's
a. total revenue is unchanged when the firm lowers its price.
b. total revenue decreases when the firm lowers its price.
c. marginal revenue is zero.
d. marginal revenue is positive.

Question 24: If the demand for its product is inelastic, a monopoly's
a. marginal revenue is negative.
b. total revenue is unchanged when the firm lowers its price.
c. total revenue increases when the firm lowers its price.
d. marginal revenue is equal to zero.

Question 25: A monopoly firm expands its output and lowers its price. The firm finds that its total revenue falls. Hence, the firm is producing in the
a. inelastic range of its supply curve.
b. elastic range of its supply curve.
c. elastic range of its demand curve.
d. inelastic range of its demand curve.


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Chapter 10_2: Monopoly

Chapter 10_2: Monopoly; Time: 40 phút

Question 1: The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point r, the monopoly's
a. marginal revenue will decrease.
b. total revenue will fall.
c. total revenue will remain the same.
d. total revenue will rise.

Question 1 - 6

Question 2: The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point u, the monopoly's
a. total revenue will remain the same.
b. total revenue will fall.
c. marginal revenue will increase.
d. total revenue will rise.

Question 3: The figure above shows a monopoly firm's demand curve. At point t
a. demand is inelastic.
b. demand is elastic.
c. demand is unit elastic.
d. total revenue is at a minimum.

Question 4: The figure above shows a monopoly firm's demand curve. The monopoly's total revenue is at its maximum when the firm produces at point
a. t.
b. u.
c. x.
d. r.

Question 5: The figure above shows a monopoly firm's demand curve. The monopoly's total revenue is zero at point
a. x.
b. t.
c. u.
d. r.

Question 6: The figure above shows a monopoly firm's demand curve. At point u in the figure, the demand facing the monopoly is
a. less than the supply.
b. inelastic.
c. unit elastic.
d. elastic.

Question 7: An unregulated monopoly will
a. produce in the elastic range of its demand curve.
b. flood the market with goods to deter entry.
c. produce only where marginal revenue is zero.
d. produce in the inelastic range of its demand curve.

Question 8: An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
a. lower its price and increase its output.
b. raise its price and increase its output.
c. raise its price and decrease its output.
d. continue to produce this level of output because any change will lower its profit.

Question 8 - 12

Question 9: The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is positive if it produces between
a. 0 and 20 units.
b. 5 and 20 units.
c. 0 and 15 units.
d. 0 and 5 units.

Question 10: The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is zero if it produces
a. 15 units of output.
b. 5 or 20 units of output.
c. 0 units of output.
d. none of the above

Question 11: The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is maximized when it produces
a. 5 units of output.
b. 20 units of output.
c. 0 units of output.
d. 15 units of output.

Question 12: The figure above shows a monopoly's total revenue and total cost curves. The monopoly's marginal revenue equals its marginal cost when it produces
a. 5 units of output.
b. 15 units of output.
c. 20 units of output.
d. 0 units of output.

Question 13 - 15

Question 13: The monopoly with the TR and TC curves shown in the figure above will produce
a. 5 units of output.
b. 20 units of output.
c. 15 units of output.
d. 0 units of output.

Question 14: For the unregulated, single-price monopoly shown in the figure above, when its profit is maximized, output will be
a. 4 units per year and the price will be $6.
b. 6 units per year and the price will be $4.
c. 4 units per year and the price will be $4.
d. None of the above answers is correct.

Question 15: The unregulated, single-price monopoly shown in the figure above will produce where its demand
a. equals its ATC curve.
b. is inelastic.
c. is elastic.
d. equals its MC curve.

Question 16 - 20

Question 16: The unregulated, single-price monopoly shown in the figure above has a total economic profit of
a. 4
b. 16
c. 24
d. 8

Question 17: The unregulated, single-price monopoly shown in the figure above will sell
a. 50 tickets.
b. 30 tickets.
c. less than 30 tickets.
d. 100 tickets.

Question 18: An unregulated, single-price monopoly is shown in the figure above. If fixed cost is $20, the monopoly's total costs when it is maximizing its profit will be
a. 30
b. 40
c. 140
d. 80

Question 19: An unregulated, single-price monopoly is shown in the figure above. If fixed cost is $20, the monopoly's total economic profit when it is maximizing its profit will be
a. 0
b. 50
c. negative.
d. 25

Question 20: The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is
a. $90.00.
b. 0
c. $22.50.
d. $45.00.

Question 21: Unregulated monopolies can often earn an economic profit in the long run because
a. they have high costs.
b. barriers to entry prevent competing firms from entering the market.
c. they receive government subsidies.
d. the risks of running a monopoly are high.

Question 22: Compared to a single-price monopoly, a perfectly competitive industry produces
a. more output and has a higher price.
b. more output and has a lower price.
c. less output and has a higher price.
d. less output and has a lower price.

Question 23: Which of the following statements is true?
a. A perfectly competitive industry produces more output and charges the same price as a single-price monopoly.
b. A perfectly competitive industry produces less output but charges a lower price than a single-price monopoly.
c. A perfectly competitive industry produces less output and charges the same price as a single-price monopoly.
d. A perfectly competitive industry produces more output and charges a lower price than a single-price monopoly.

Question 24: The fundamental reason a single-price monopoly creates a deadweight loss is that it
a. restricts output.
b. raises variable cost.
c. raises fixed cost.
d. reduces the elasticity of demand.

Question 25

Question 25: The unregulated, single-price monopolist illustrated in the figure above has a total revenue of
a. $8.00 per day.
b. $36.00 per day.
c. $16.00 per day.
d. $40.00 per day.



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