Chapter 22

Question 1

Which statement is false #1?
A. A monopoly is both a firm and an industry.
B. A monopoly is an imperfect competitor
C. There are no monopolies in the United States
D. None of these statements is false

Answer 1

C. There are no monopolies in the United States

Question 2

Which statement is false #2?
A. the monopolist demand and marginal revenue curves are two seperate curves.
B. The monopolist can sell more output only by lowering price.
C. The monopolist produces tat the minimum point of her ATC curve.
D. None of these statements is false

Answer 2

C. The monopolist produces tat the minimum point of her ATC curve.

Question 3

Which statement is true #1
A. All monoolists products have close substitutes.
B. Most firms in the US are monopolies.
C. There are no monopolies in the US
D. A monopoly is a fim that produces all the output in an industry.
E. Non of these is true.

Answer 3

D. A monopoly is a fim that produces all the output in an industry.

Question 4

The monoploist produces

Answer 4

A. where MC=MR

Question 5

Which statement is true #2?
A. The monopolist cannot lose money.
B. The monopolist alwasys operates a large firm.
C. The monopolist will not lose money in the short run.
D. The monopolist will not lose money in the long run.

Answer 5

D. The monopolist will not lose money in the long run.

Question 6

The most efficient output is found

Answer 6

B. at the bottom of the ATC curve

Question 7

An example of the government ownership of a monopoly would be

Answer 7

A. the Tennessee Valley Authority

Question 8

Which statement is true #3?
A. The monopolist’s most effiecient output is her most profitable output as well.
B. The monopolist charges a higher price than the perfect competitor in the long run.
C. All Monopolist have control over an essential resource.
D. None are true.

Answer 8

B. The monopolist charges a higher price than the perfect competitor in the long run.

Question 9

Which statement is true #4?
A. All monopolises are very large firms.
B. Most monopolists do not produce at an output in which MC=MR.
C. The monopolist’s demand curve and MR curve are identical.
D. None is true

Answer 9

D. None is true

Question 10

A monopolist operates at the minimum point of her ATC curve

Answer 10

D. in neither the short run nor the long run

Question 11

If the government attempts to break up a natural monopoly to enforce competition in an industry

Answer 11

A. the avereage cost of producting the good will increase

Question 12

In the United States, natural monopolies

Answer 12

C. are commonly regulated by governments

Question 13

Patents function to

Answer 13

B. temporarily protect monopoly power

Question 14

Monopoly firms are

Answer 14

C. sometimes very large

Question 15

A public utility would be an example of

Answer 15

A. a natural monopoly

Question 16

Monopoly profit

Answer 16

A. equals (price-ATC) times quantity sold

Question 17

When an industry is a natural monopoly

Answer 17

A. the economies of scale in it are very great

Question 18

The perfect competitor__________produces at the output at which MC=MR; the monopolist _______ produces at the output at which MC=MR.

Answer 18

A. Always;always

Question 19

Which statement is true #5?
A. Some monopolists are imperfect competitors.
B. Most monopolists are imperfect competitors.
C. All monopolists are imperfect competitors.
D. None is true.

Answer 19

C. All monopolists are imperfect competitors

Question 20

Which one of the following companies is NOT a natural monopoly?

Answer 20

A. The Internation Nickel Company

Question 21

A monopolist makes a profit

Answer 21

C. in both the short and long run

Question 22

Which statement is true #6?
A. Since the monopolist is the only firm in the industry, her profit is calculated differently from the way a perfect competitor would calculate his profit.
B. The monopolist’s demend curve and marginal revenue curve are the same line.
C. In the long run under monopoly, the most efficient output is the most profitable output.
D. A monopolist can lose money

Answer 22

D. A monopolist can lose money

Question 23

Each of the following is a legal barrier to entry into an industry except

Answer 23

D. brand names

Question 24

Which statement is true #7?
A. One basis for monopoly is control over an essential resource.
B. Monopoly is illegal in the US
C. The economies of being established is the same as economies of scale.
D. General Motors is a monopoly.

Answer 24

A. One basis for monopoly is control over an essential resource.

Question 25

Which statement is true #8?
A. Monoplies tend to be inefficient.
B. Most industries in the US are monopolies
C. All electric power companies are natural monopolies that do not have competition.
D. Although big business has great economic power, that power is reaely translated into political.

Answer 25

A. Monoplies tend to be inefficient.