SurveynofnEconomics,n5en(O'Sullivannetnal.)nCha
ptern7n MonopolynandnPricenDiscrimination
7.1 Then Monopolist'sn Output n Decision
1) A n market n served n bynonlyn onen firmn isn called n a:
A) perfectlyncompetitiven market.
B) monopoly.
C) oligopoly.
D) Anynof nthen abovencouldn bencorrect.n
Answer:n B
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
2) A n firmnthat n hasn market n powern hasn then ability:
A) ton affect n then pricen of n itsn ownn product.
B) ton conduct n illegalnactivitiesn without n fearn of nprosecution.
C) ton command n consumern ton buynanyn quantityn fromnthem.
D) ton driven itsn competitionnoutnofnthen market.n
Answer:n A
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
3) Whichnof nthen followingn firmsn haven market n power?
A) privaten universities
B) fast n food n chainsn suchn asn McDonald's
C) themen parks
D) Allnof nthen abovenhaven market npower.n
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
4) Whichnof nthen followingn firmsn haven non market n power?
A) clothingn companies
B) fast n food n chainsn suchn asn McDonald's
C) themen parks
D) gold npannersnduringnthengold nrushn
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
1
Copyright n©n2012 nPearson n Education,n Inc.
,5) Whichnof nthen followingn isn NOTn an characteristicn of nan monopoly?
A) Theren isn onlyn onen seller.
B) A n monopolist n isn an price-taker.
C) Theren exist n barriersn ton entry.
D) A nmonopolist'snsalesnrevenuen isnconstrained n bynthenmarket n demand.n
Answer:n B
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
6) Whichnof nthen followingn isn NOTn an barriern ton entryn forn monopoly?
A) an patent
B) government n licensing
C) largen economiesn of nscale
D) an largen numbern of nexistingn firmsn innan market n
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
7) Whenneconomistsn sayn an market n hasn "barriersn ton entry"n theynrefern to:
A) monopolistsn beingn prohibited n fromnsellingn theirn productsnton certainn customers.
B) an policyn that n somen countriesn establishn ton reducen importsn fromnothern countries.
C) factorsnthat n prevent n othern firmsn fromnchallengingn an firmn withn market n power.
D) economicn profitsnthat n aren positive,n but ntoonhighn ton encouragen entry.n
Answer:n C
Diff:n1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
8) Whichn of n then followingn isn ann examplen of nan barriern ton entry?
A) A n firmn isn openn fornbusinessn onlynat n certainnhoursn ofnthen day,nandn hasnitsn doorsnlocked nat nothern ti
mes.
B) Then government n grantsn licensesn ton taxicabndrivers,n without nwhichn it nisn illegalnton operaten an t
axicab.
C) A n newspapern sellsn advertisingn spacen ton businesses.
D) Lacknof nanWebnsite.n
Answer:n B
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
2
Copyright n©n2012 nPearson n Education,n Inc.
,9) Whichnof nthen followingn isn NOTn ann artificialn barriern ton entry?
A) an patent
B) government n franchise
C) largen economiesn of nscale
D) government nlicensingn
Answer:n C
Diff:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
10) Whenn an firmn isn awardednanpatent,n it nisn givennmonopolynrightsn tonthen productionnofnthat np
roduct n forn years.
A) 10
B) 20
C) 30
D) 50
Answer:n Bn Diff
:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Fact
11) Whichn of nthen followingn firmsn relyn onn patentsnthen most nasnthenbarriern ton keepnothern firmsn fromn e
nteringn then industry?
A) pharmaceuticalnfirms
B) textbookn publishers
C) law n firms
D) winenmakers
n Answer:n A n Dif
f:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
12) A n monopolyn mayn arisen duen to:
A) an patent.
B) net n workn externalities.
C) largen economiesn of nscale.
D) allnof nthenaboven
Answer:n D
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
AACSB:n Reflectiven Thinking
3
Copyright n©n2012 nPearson n Education,n Inc.
, 13) isn an monopolynthat n existsn inn ann industrynwheren then largen economiesn of nscalen actsn asnit
sn barriern ton entry.
A) A n naturaln monopoly
B) A nmonopolisticn competitor
C) A n regulated n monopoly
D) A npricendiscriminatorn
Answer:n A
Diff:n 2
Topic:n Monopolynand n Pricen Discriminationn Sk
ill:n Definition
14) A n networkn externalitynoccursn when:
A) an firmn hasn an patent.
B) then valuen of nan product n ton an consumern increasen withn then numbern of nothern consumersn whon usen it.
C) an firmn hasn largen economiesn of nscale.
D) then valuen of nanproductntonan consumern requiresn anothern product.n
Answer:n B
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
AACSB:n Reflectiven Thinking
15) Facebookn isn an socialn networkingn Webn siten that nisn usedn bynangrowingn numbern ofn individuals.nB
ecausen of n itsn popularity,n it n isn now nmoren difficult n forn newn networkingn websitesn tonenternandn compe
ten withn Facebook.n Facebookn enjoysn asn an barriern forn othersnton enternthen market.
A) an networkn externality
B) pricendiscrimination
C) an negativen externality
D) economiesnof nscale
n Answer:n A
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
16) Then demand n curven that n an monopolist n facesn is:
A) then market n demand n curve.
B) then samen asn then demand n curven that n facesn an perfectlyn competitiven firm.
C) not n affected n bynchangesn inn then pricesn of nothern goods.
D) generallyn flatternthannthen demand ncurventhat n facesn an perfectlyncompetitiven firm.n
Answer:n A
Diff:n 2
Topic:n TotalnRevenuen and n MarginalnRevenuen
Skill:n Conceptual
AACSB:n Reflectiven Thinking
4
Copyright n©n2012 nPearson n Education,n Inc.
ptern7n MonopolynandnPricenDiscrimination
7.1 Then Monopolist'sn Output n Decision
1) A n market n served n bynonlyn onen firmn isn called n a:
A) perfectlyncompetitiven market.
B) monopoly.
C) oligopoly.
D) Anynof nthen abovencouldn bencorrect.n
Answer:n B
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
2) A n firmnthat n hasn market n powern hasn then ability:
A) ton affect n then pricen of n itsn ownn product.
B) ton conduct n illegalnactivitiesn without n fearn of nprosecution.
C) ton command n consumern ton buynanyn quantityn fromnthem.
D) ton driven itsn competitionnoutnofnthen market.n
Answer:n A
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
3) Whichnof nthen followingn firmsn haven market n power?
A) privaten universities
B) fast n food n chainsn suchn asn McDonald's
C) themen parks
D) Allnof nthen abovenhaven market npower.n
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
4) Whichnof nthen followingn firmsn haven non market n power?
A) clothingn companies
B) fast n food n chainsn suchn asn McDonald's
C) themen parks
D) gold npannersnduringnthengold nrushn
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
1
Copyright n©n2012 nPearson n Education,n Inc.
,5) Whichnof nthen followingn isn NOTn an characteristicn of nan monopoly?
A) Theren isn onlyn onen seller.
B) A n monopolist n isn an price-taker.
C) Theren exist n barriersn ton entry.
D) A nmonopolist'snsalesnrevenuen isnconstrained n bynthenmarket n demand.n
Answer:n B
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
6) Whichnof nthen followingn isn NOTn an barriern ton entryn forn monopoly?
A) an patent
B) government n licensing
C) largen economiesn of nscale
D) an largen numbern of nexistingn firmsn innan market n
Answer:n D
Diff:n 1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
7) Whenneconomistsn sayn an market n hasn "barriersn ton entry"n theynrefern to:
A) monopolistsn beingn prohibited n fromnsellingn theirn productsnton certainn customers.
B) an policyn that n somen countriesn establishn ton reducen importsn fromnothern countries.
C) factorsnthat n prevent n othern firmsn fromnchallengingn an firmn withn market n power.
D) economicn profitsnthat n aren positive,n but ntoonhighn ton encouragen entry.n
Answer:n C
Diff:n1
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
8) Whichn of n then followingn isn ann examplen of nan barriern ton entry?
A) A n firmn isn openn fornbusinessn onlynat n certainnhoursn ofnthen day,nandn hasnitsn doorsnlocked nat nothern ti
mes.
B) Then government n grantsn licensesn ton taxicabndrivers,n without nwhichn it nisn illegalnton operaten an t
axicab.
C) A n newspapern sellsn advertisingn spacen ton businesses.
D) Lacknof nanWebnsite.n
Answer:n B
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
2
Copyright n©n2012 nPearson n Education,n Inc.
,9) Whichnof nthen followingn isn NOTn ann artificialn barriern ton entry?
A) an patent
B) government n franchise
C) largen economiesn of nscale
D) government nlicensingn
Answer:n C
Diff:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
10) Whenn an firmn isn awardednanpatent,n it nisn givennmonopolynrightsn tonthen productionnofnthat np
roduct n forn years.
A) 10
B) 20
C) 30
D) 50
Answer:n Bn Diff
:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Fact
11) Whichn of nthen followingn firmsn relyn onn patentsnthen most nasnthenbarriern ton keepnothern firmsn fromn e
nteringn then industry?
A) pharmaceuticalnfirms
B) textbookn publishers
C) law n firms
D) winenmakers
n Answer:n A n Dif
f:n 3
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
12) A n monopolyn mayn arisen duen to:
A) an patent.
B) net n workn externalities.
C) largen economiesn of nscale.
D) allnof nthenaboven
Answer:n D
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
AACSB:n Reflectiven Thinking
3
Copyright n©n2012 nPearson n Education,n Inc.
, 13) isn an monopolynthat n existsn inn ann industrynwheren then largen economiesn of nscalen actsn asnit
sn barriern ton entry.
A) A n naturaln monopoly
B) A nmonopolisticn competitor
C) A n regulated n monopoly
D) A npricendiscriminatorn
Answer:n A
Diff:n 2
Topic:n Monopolynand n Pricen Discriminationn Sk
ill:n Definition
14) A n networkn externalitynoccursn when:
A) an firmn hasn an patent.
B) then valuen of nan product n ton an consumern increasen withn then numbern of nothern consumersn whon usen it.
C) an firmn hasn largen economiesn of nscale.
D) then valuen of nanproductntonan consumern requiresn anothern product.n
Answer:n B
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Definition
AACSB:n Reflectiven Thinking
15) Facebookn isn an socialn networkingn Webn siten that nisn usedn bynangrowingn numbern ofn individuals.nB
ecausen of n itsn popularity,n it n isn now nmoren difficult n forn newn networkingn websitesn tonenternandn compe
ten withn Facebook.n Facebookn enjoysn asn an barriern forn othersnton enternthen market.
A) an networkn externality
B) pricendiscrimination
C) an negativen externality
D) economiesnof nscale
n Answer:n A
Diff:n 2
Topic:n Monopolynand n PricenDiscriminationn Sk
ill:n Conceptual
AACSB:n Reflectiven Thinking
16) Then demand n curven that n an monopolist n facesn is:
A) then market n demand n curve.
B) then samen asn then demand n curven that n facesn an perfectlyn competitiven firm.
C) not n affected n bynchangesn inn then pricesn of nothern goods.
D) generallyn flatternthannthen demand ncurventhat n facesn an perfectlyncompetitiven firm.n
Answer:n A
Diff:n 2
Topic:n TotalnRevenuen and n MarginalnRevenuen
Skill:n Conceptual
AACSB:n Reflectiven Thinking
4
Copyright n©n2012 nPearson n Education,n Inc.
