ECON B 251 FINAL EXAM QUESTIONS WITH COMPLETE
SOLUTIONS GUARANTEED PASS
Which of the following are characteristics of a monopoly? -
ANSWER - >the firms demand cure is downward sloping, there
are high barriers to entry or exit, the firm determines the price
to charge it's buyers.
Which of the following are barriers to entry for a monopoly? -
ANSWER - >patents, ownership of a vital resource, public
franchises
Which of the following is true for BOTH a monopoly and a
perfectly competitive firm? - ANSWER - >The profit maximizing
output level occurs where marginal revenue is equal to
marginal cost
The profit maximizing single price monopolist produces along
the elastic portion of its demand curve - ANSWER - >elastic
Quantity ( Pizzas per day)
0
1
2
3
4
5
Price (dollars per pizzas)
,$20
18
16
14
12
10
The table above shows the demand for a monopolist's output.
The marginal revenue of increasing production from 3 to 4 units
is $ - ANSWER - >6
Quantity ( Pizzas per day)
0
1
2
3
4
5
Price (dollars per pizzas)
$20
18
16
14
12
10
The table above shows the demand for a monopolists output. iF
the pizzeria is a single-price monopoly and the marginal cost of
a pizza is $6, then the firms profit maximizing output is ---
pizzas. At that amount the firm charges a price of $--- and its
total revenue is $--- - ANSWER - >4, 12, 48
, Joe, a hair dresser, offers students a discount price on haircuts.
This form of pricing is an example of - ANSWER - >price
discrimination
The more perfectly a monopoly can price discriminate, the ---
its output and the --- its profit. - ANSWER - >larger, larger
compared to a similar perfectly competitive industry, a single-
price monopoly decreases consumer surplus and decreases
economic efficiency. - ANSWER - >Decreases, decreases
Rent seeking by a monopolist --- the social cost of a monopoly
and --- its --- - ANSWER - >increases, cost, increases, average
total cost
Which of the following are characteristics of perfect
competition? - ANSWER - >many sellers, there are no barriers
to entry or exit, the market demand curve is downward sloping
The demand for corn from Hoosier farm is perfectly elastic
because corn from Hoosier farms is - ANSWER - >a perfect
substitute for corn from other farms
the profit maximizing level of output for the perfectly
competitive firm occurs where - ANSWER - >price = marginal
cost
Quantity (Pizzas for day)
SOLUTIONS GUARANTEED PASS
Which of the following are characteristics of a monopoly? -
ANSWER - >the firms demand cure is downward sloping, there
are high barriers to entry or exit, the firm determines the price
to charge it's buyers.
Which of the following are barriers to entry for a monopoly? -
ANSWER - >patents, ownership of a vital resource, public
franchises
Which of the following is true for BOTH a monopoly and a
perfectly competitive firm? - ANSWER - >The profit maximizing
output level occurs where marginal revenue is equal to
marginal cost
The profit maximizing single price monopolist produces along
the elastic portion of its demand curve - ANSWER - >elastic
Quantity ( Pizzas per day)
0
1
2
3
4
5
Price (dollars per pizzas)
,$20
18
16
14
12
10
The table above shows the demand for a monopolist's output.
The marginal revenue of increasing production from 3 to 4 units
is $ - ANSWER - >6
Quantity ( Pizzas per day)
0
1
2
3
4
5
Price (dollars per pizzas)
$20
18
16
14
12
10
The table above shows the demand for a monopolists output. iF
the pizzeria is a single-price monopoly and the marginal cost of
a pizza is $6, then the firms profit maximizing output is ---
pizzas. At that amount the firm charges a price of $--- and its
total revenue is $--- - ANSWER - >4, 12, 48
, Joe, a hair dresser, offers students a discount price on haircuts.
This form of pricing is an example of - ANSWER - >price
discrimination
The more perfectly a monopoly can price discriminate, the ---
its output and the --- its profit. - ANSWER - >larger, larger
compared to a similar perfectly competitive industry, a single-
price monopoly decreases consumer surplus and decreases
economic efficiency. - ANSWER - >Decreases, decreases
Rent seeking by a monopolist --- the social cost of a monopoly
and --- its --- - ANSWER - >increases, cost, increases, average
total cost
Which of the following are characteristics of perfect
competition? - ANSWER - >many sellers, there are no barriers
to entry or exit, the market demand curve is downward sloping
The demand for corn from Hoosier farm is perfectly elastic
because corn from Hoosier farms is - ANSWER - >a perfect
substitute for corn from other farms
the profit maximizing level of output for the perfectly
competitive firm occurs where - ANSWER - >price = marginal
cost
Quantity (Pizzas for day)
