economics data bank

61) With price discrimination, a monopoly

A) produces less output than if it does not price discriminate.

B) converts consumer surplus into deadweight loss.

C) converts producer surplus into economic profit.

D) can charge a single price to all customers.

E) converts consumer surplus into economic profit.

61)

62) A price-discriminating monopoly

A) cannot offer discounts.

B) cannot control the price of its product.

C) sells a larger quantity than it would if it were a single-price monopoly.

D) is illegal.

E) makes a smaller economic profit than it would if it were a single-price monopoly.

62)

63) In the above figure, a perfectly competitive market will have a price of ________ and a

single-price monopoly will have a price of ________.

A) P1 and quantity ofQ1; P2 and quantity ofQ2

B) P2 and quantity ofQ2; P3 and quantity ofQ1

C) P2 and quantity ofQ1; P1 and quantity ofQ1

D) P2 and quantity ofQ2; P1 and quantity ofQ1

E) P3 and quantity ofQ3; P1 and quantity ofQ1

63)

64) A single-price monopoly transfers

A) economic profit to the government.

B) consumer surplus to producers.

C) producer surplus to consumers.

D) economic profit to deadweight loss.

E) economic profit to consumers.

64)

65) The figure above shows the demand curve, marginal revenue curve, and marginal cost curve.

The amount of consumer surplus when the market has a monopoly producer is

A) ace. B)bcef. C)bcd. D)abf. E)acd.

65)

66) The figure above shows the demand curve, marginal revenue curve, and marginal cost curve.

The amount of consumer surplus when the market has a monopoly producer is ________ and

the amount of consumer surplus when the market is perfectly competitive is ________.

A) abf; aceB) ace; bcdC) ace; abfD) abf; bcdE) bcd; ace

66)

67) Compared to a perfectly competitive market, a single-price monopoly sets

A) a higher price.

B) a lower price.

C) the same price.

D) a price that might be higher, lower, or the same depending on whether the monopoly's

marginal revenue curve lies above, below, or on its demand curve.

E) a price that might be higher, lower, or the same depending on whether the monopoly's

marginal cost curve lies above, below, or on its marginal revenue curve.

67)

68) Compared to a perfectly competitive industry, a single-price monopoly produces

A) the same output.

B) more output.

C) less output.

D) some amount that might be more, less, or the same depending on whether the monopoly's

marginal revenue curve lies above, below, or on its demand curve.

E) some amount that might be more, less, or the same depending on whether the monopoly's

marginal cost curve lies above, below, or on its marginal revenue curve.

68)

69) Mark owns a cattle ranch near Hugo, Oklahoma. Mark is currently producing beef at an output

level where marginal revenue exceeds marginal cost. In order to maximize his profit, Mark

should

A) decrease his output.

B) shut down his ranch.

C) increase his output.

D) not change his output.

E) probably change his output, but more information is needed to determine if he should

increase, decrease, or not change it.

69)

70) When compared to a perfectly competitive market, a single-price monopoly with the same costs

produces ________ output and charges ________ price.

A) a smaller; a lower

B) a larger; a lower

C) a smaller; a higher

D) a smaller; the same

E) the same; a higher

70)

71) Suppose the Busy Bee Cafe´is the monopoly producer of hamburgers in Hugo, Oklahoma. The

above figure represents the demand, marginal revenue, and marginal cost curves for this

establishment. What quantity will the Busy Bee produce to maximize its profit?

A) 20 hamburgers per hour

B) 50 hamburgers per hour

C) 10 hamburgers per hour

D) 0 hamburgers per hour.

E) 30 hamburgers per hour

71)

Price(dollars) Quantity(units)

6 1

5 2

4 3

3 4

2 5

1 6

72) The above table gives the demand schedule for a monopoly. The demand is elastic at all prices

between

A) $3 and $1.

B) $5 and $1.

C) $4 and $3.

D) $6 and $1.

E) $6 and $4.

72)

73) The above table gives the demand schedule for a monopoly. The demand is inelastic over the

entire price range between

A) $6 and $4.

B) $6 and $1.

C) $3 and $1.

D) $4 and $3.

E) $5 and $1.

73)

74) If the Boston Red Sox baseball team is currently charging a ticket price where its demand is

inelastic, then the Red Sox's marginal revenue is

A) positive.

B) zero.

C) undefined.

D) maximized.

E) negative.

74)

Quantity

(units)

Price

(dollars per unit)

1 8

2 7

3 6

4 5

5 4

6 3

75) The table above gives the demand for a monopolist's output. What is the total revenue in when 3

units of output are produced?

A) $18 B) $20 C) $21 D) $6

75)

76) The table above gives the demand for a monopolist's output. What is the marginal revenue

when output is increased from 5 to 6 units?

A) $18 B)-$2 C) $4 D) $3

76)

77) The demand curve facing a single-price monopoly is

A) the same as only the marginal revenue curve.

B) the same as both the marginal revenue curve and the marginal cost curve.

C) below the marginal revenue curve.

D) above the marginal revenue curve.

E) the same as only the marginal cost curve.

77)

78) A single-price monopoly can sell 10 units of its product at a price of $45 each but to sell 11 units,

the monopoly must cut the price to $44. What is the marginal revenue of the extra unit sold?

A) $484 B) $450 C) $34 D)-$1 E) $44

78)

79) A single-price monopoly faces a linear demand curve. If the marginal revenue for the second

unit is $20, then the marginal revenue for the

A) third unit is also $20.

B) third unit is less than $20.

C) first unit is less than $20.

D) third unit is more than $20.

E) more information is needed to determine if the marginal revenue for the third unit is more

than, less than, or equal to $20.

79)

80) For a single-price monopoly, price is

A) greater than marginal revenue.

B) equal to marginal revenue.

C) less than marginal revenue because the firm must lower its price in order to sell another

unit of output.

D) less than marginal revenue because the firm cannot increase its total revenue when the

demand curve is downward sloping.

E) equal to zero because the firm is not a price taker.

80)