Need economics help with some multiple questions

MULTIPLE CHOICE. ; Choose the one alternative that best completes the statement or answers the question. ;

1)
A monopoly is a seller of a product
1)
_______ ;

A)
without a well-defined demand curve.
B)
with many substitutes. ;

C)
;without a close substitute.
D)
with a perfectly inelastic demand. ;

2)
If we use a narrow definition of monopoly, then a monopoly is defined as a firm
2)
_______ ;

A)
that can ignore the actions of all other firms because it produces a superior product compared to its rivals’ products. ;

B)
that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. ;

C)
that has the largest market share in an industry. ;

D)
that has been granted special production rights by the government. ;

3) In 2011, Microsoft filed a complaint with the European Commission accusing Google of taking steps to monopolize the Internet search engine business. Microsoft’s primary complaint was that
3)
_______ ;

A)
Google is the only Internet search engine available to Windows operating system users. ;

B)
Google owns the Internet advertising companies that pay for ads on search engine sites, and has prohibited ads from being sold to competitors. ;

C)
the European Union contracts exclusively with Google for its Internet search engine use. ;

D)
Google was using its dominant position as an Internet search engine to exclude competitors. ;

4)
Compared to a monopolistic competitor, a monopolist faces ;
4)
_______ ;

A)
a more elastic demand curve. ;

B)
a more elastic demand curve at higher prices and a more inelastic demand curve at lower prices. ;

C)
a more inelastic demand curve. ;

D)
a demand curve that has a price elasticity coefficient of zero. ;

5)
Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly? ;
5)
_______ ;

A)
Each must lower its price to sell more output. ;

B)
Each sets a price for its product that will maximize its revenue. ;

C)
Each maximizes profits by producing a quantity for which price equals marginal cost. ;

D)
Each maximizes profits by producing a quantity for which marginal revenue equals marginal cost. ;

6) The Google search engine has a market share of ________ in the United States and ________ in Europe.
6)
_______ ;

A)
70 percent; 90 percent
B)
45 percent; 15 percent ;

C)
90 percent; 25 percent
D)
50 percent; 50 percent ;

7)
Which one of the following about a monopoly is false? ;
7)
_______ ;

A)
A monopoly could break even in the long run. ;

B)
A monopoly could make profits in the long run. ;

C)
A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly. ;

D)
A monopoly status could be temporary. ;

8)
A United States government patent lasts
8)
_______ ;

A)
forever.
B)
50 years.
C)
20 years.
D)
7 years. ;

9)
Governments grant patents to
9)
_______ ;

A)
encourage low prices. ;

B)
encourage competition. ;

C)
compensate firms for research and development costs. ;

D)
encourage firms to reveal secret production techniques. ;

10)
For a natural monopoly to exist
10)
______ ;

A)
a firm’s long-run average cost curve must exhibit economies of scale throughout the relevant range of market demand. ;

B)
a firm’s long-run average cost curve must exhibit diseconomies of scale beyond the economically efficient output level. ;

C)
a firm must continually buy up its rivals. ;

D)
a firm must have a government-imposed barrier. ;

11)
There are several types of barriers to entry that can create a monopoly. Which of the following barriers is the result of government action? ;
11)
______ ;

A)
control of a key resource
B)
economies of scale ;

C)
public franchise
D)
network externalities ;

Figure 15–1

12)
Refer to Figure 15–1. Which of the following statements about the firm depicted in the diagram is true?
12)
______ ;

A)
The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises. ;

B)
The fact that this firm is a natural monopoly is shown by the continually declining long-run average total cost as output rises. ;

C)
The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises. ;

D)
The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits. ;

13)
A natural monopoly is most likely to occur in which of the following industries? ;
13)
______ ;

A)
the software industry because of the importance of network externalities ;

B)
an industry where fixed costs are very large relative to variable costs ;

C)
the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years ;

D)
the diamond mining and marketing industry because one firm can control a key resource ;

14)
A monopolist’s profit maximizing price and output correspond to the point on a graph
14)
______ ;

A)
where price is as high as possible. ;

B)
where total costs are the smallest relative to price. ;

C)
where marginal revenue equals marginal cost and charging the price on the market demand curve for that output. ;

D)
where average total cost is minimized. ;

15)
Because a monopoly’s demand curve is the same as the market demand curve for its product
15)
______ ;

A)
the monopoly is a price taker. ;

B)
the monopoly must lower its price to sell more of its product. ;

C)
the monopoly’s marginal revenue equals its price. ;

D)
the monopoly’s average total cost always falls as it increases its output. ;

Figure 15–2

Figure 15-2 above shows the demand and cost curves facing a monopolist. ;

16)
Refer to Figure 15–2. To maximize profit, the firm will produce
16)
______ ;

A)
Q1.
B)
Q2.
C)
Q3.
D)
Q4. ;

17)
Refer to Figure 15–2. The firm’s profit-maximizing price is ;
17)
______ ;

A)
P1.
B)
P2.
C)
P3.
D)
P4. ;

18)
Refer to Figure 15–2. If the firm’s average total cost curve is ATC1, the firm will
18)
______ ;

A)
suffer a loss.
B)
break even. ;

C)
make a profit.
D)
face competition. ;

19)
Refer to Figure 15–2. If the firm’s average total cost curve is ATC2, the firm will
19)
______ ;

A)
suffer a loss.
B)
break even. ;

C)
make a profit.
D)
face competition. ;

20)
Refer to Figure 15–2. If the firm’s average total cost curve is ATC3, the firm will
20)
______ ;

A)
suffer a loss.
B)
break even. ;

C)
make a profit.
D)
face competition. ;

Table 15–1

Price per Unit	Quantity Demanded (units)	Total Cost of Production ; (dollars)
$85	10	$530
; 80	11	; 540
; 75	12	; 550
; 70	13	; 560
; 65	14	; 575
; 60	15	; 595
; 55	16	; 625

A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1.

21)
Refer to Table 15–1. What is the marginal revenue from the sale of the 12th unit?
21)
______ ;

A)
$75 ;
B)
$50 ;
C)
$20 ;
D)
-$5 ;

22)
Refer to Table 15–1. What is the firm’s profit-maximizing output and what is the price charged to sell this output?
22)
______ ;

A)
P = $70; Q = 13 ;
B)
P = $85; Q = 10 ;
C)
P = $65; Q = 14 ;
D)
P = $80; Q = 11 ;

23)
Refer to Table 15–1. What is the amount of the firm’s profit?
23)
______ ;

A)
$335
B)
$350
C)
$880
D)
$910 ;

24)
Long-run economic profits would most likely exist in which market structure? ;
24)
______ ;

A)
monopoly and oligopoly ;

B)
monopoly only ;

C)
monopoly and monopolistic competition ;

D)
monopoly, monopolistic competition and oligopoly ;

Figure 15–4

Figure 15-4 shows the demand and cost curves for a monopolist.

25)
Refer to Figure 15–4. What is the profit-maximizing/loss-minimizing output level?
25)
______ ;

A)
600 units
B)
800 units
C)
940 units
D)
1,160 units ;

26)
Refer to Figure 15–4. What is the price charged for the profit-maximizing output level?
26)
______ ;

A)
$13
B)
$21
C)
$27
D)
$34 ;

27)
Which of the following is true for a monopolist?
27)
______ ;

A)
Being the only seller in the market, the monopolist faces a perfectly elastic demand curve. ;

B)
Being the only seller in the market, the monopolist faces the market demand curve. ;

C)
Being the only seller in the market, the monopolist faces a perfectly inelastic demand curve. ;

D)
Being the only seller in the market, the monopolist faces a downward sloping demand curve that lies below the marginal revenue curve. ;

28)
A price maker is
28)
______ ;

A)
a consumer who participates in an auction where she announces her willingness to pay for a product. ;

B)
a person who actively seeks out the best price for a product that he or she wishes to buy. ;

C)
a firm that has some control over the price of the product it sells. ;

D)
a firm that is able to sell any quantity at the highest possible price. ;

29)
Wendell can sell five motor homes per week at a price of $22,000. If he lowers the price of motor homes to $20,000 per week he will sell six motor homes. What is the marginal revenue of the sixth motor home?
29)
______ ;

A)
$10,000
B)
$12,000
C)
$20,000
D)
$22,000 ;

30)
If a monopolist’s marginal revenue is $35 per unit and its marginal cost is $25, then
30)
______ ;

A)
to maximize profit the firm should continue to produce the output it is producing. ;

B)
to maximize profit the firm should decrease output. ;

C)
to maximize profit the firm should increase output. ;

D)
Not enough information is given to say what the firm should do to maximize profit. ;

Figure 15–4

Figure 15-4 shows the demand and cost curves for a monopolist.

31)
Refer to Figure 15–4. What is the amount of the monopoly’s total revenue?
31)
______ ;

A)
$21,600
B)
$20,400
C)
$19,740
D)
$7,800 ;