Econ chapter 12 smartbook - Assignment Essays

question

Which of the following exists when a single firm is the sole producer of a product for which there are no close substitutes?

answer

pure monopoly

question

________ utilities are government owned or regulated.

answer

Public

question

What is the term for factors that prohibit firms from entering an industry?

answer

Barriers to entry

question

Economies of scale refer to ______ average total costs with added firm size.

answer

declining

question

Government creates_________ barriers to entry.

answer

legal

question

A pure monopoly exists when a single firm is the sole producer of a product for which there are no close ___.

answer

substitutes

question

It is difficult to start up a major league sports team because existing professional teams have contracts with the best players and long-term leases on stadiums. Which barrier to entry does this illustrate?

answer

control of a key source

question

Select all that apply
Which of the following are characteristics of public utilities?

answer

- Monopolies or near monopolies
-Government owned or regulated

question

Slashing prices is an example of an entry barrier created by a(n)

answer

monopoly

question

The strongest barriers to entry effectively block all ______.

answer

potential competition

question

Select all that apply
Which of the following are assumptions made in the model of pure monopoly?

answer

- Patents, economies of scale, and resource ownership secure the firm's monopoly.
- No unit of government regulates the firm.- The firm is a single
-price monopolist and charges the same price for all units of output.

question

What term is used to describe declining average total costs with added firm size?

answer

economies of scale

question

The change in total revenue associated with a one-unit change in output is called______ revenue.

answer

marginal

question

_______create(s) legal barriers to entry.

answer

government

question

Price makers are firms with:

answer

downward sloping demand curves

question

______ of essential property is a barrier to entry into an industry.

answer

control

question

Select all that apply
Which of the following are entry barriers created by monopolists?

answer

-Increased advertising
-Price reductions

question

How much will a profit-seeking monopolist produce if producing is preferable to shutting down?

answer

Up to the output at which marginal revenue equals marginal cost

question

Patents, economies of scale, and resource ownership are all assumptions of the pure ______ model

answer

monopoly, or monopolisitc

question

Which of the following does the monopolist not have?

answer

a supply curve

question

Marginal revenue is the change in ______ revenue associated with a single-unit change in output.

answer

total

question

Why might a monopolist accept a less-than-maximum per-unit profit?

answer

Additional sales more than compensate for the lower profit per unit.

question

Firms with downward-sloping product demand curves are called price

answer

makers, setters, or maker

question

Which of the following explains why a pure monopolist is able to maintain an economic profit in the long run?

answer

There are no new entrants to increase supply, drive down price, and eliminate profit.

question

A monopolist will never choose a price-quantity combination where price reductions cause:

answer

a decrease in total revenue

question

A monopolist does not achieve productive efficiency because it produces a level of output that does not correspond to the minimum point of the ______-_______ cost curve.

answer

average total

question

When a monopolist charges a higher price than a purely competitive firm would, the monopolist essentially ______.

answer

levies a private tax on consumers

question

Select all that apply
A monopolist does not have a supply curve because:

answer

- it does not equate price with marginal cost
-there is no single, unique price associated with each level of output.

question

X-inefficiency occurs when a firm operates at a cost that is _______(higher/lower) than the lowest cost for a particular level of output.

answer

Higher, greater, or more

question

The monopolist seeks maximum_______ profit, not maximum unit profit.

answer

total

question

The government broke up Standard Oil in 1911 due to its breach of _____ laws

answer

antitrust

question

A(n) ______ is able to maintain an economic profit in the long run because there are no new entrants to increase supply, drive down price, and eliminate economic profit.
Multiple choice question.

answer

monopoly

question

The monopolist's level of output is not at the minimum point of ______, meaning it will not be productively efficient.

answer

average total cost

question

What is the term used to refer to charging different prices to different buyers of a specific product?

answer

price discrimination

question

How does a monopoly generally transfer income?

answer

From consumers to the owners of the monopoly

question

Market segregation must exist in order for a monopolist to ______.

answer

price discriminate

question

When a firm produces a specific output level at a higher cost than the necessary cost for that level of output, it is called ______.

answer

x-innefficeny

question

Baseball ticket sellers charge a different price for adults and children. Ballpark concession stands charge the same prices for products sold to any customer. The baseball ticket sellers are providing a successful example of

answer

price discrimination

question

Select all that apply
If a firm is found guilty of achieving a monopoly through anticompetitive actions, then which of the following may occur?

answer

-The firm may be expressly prohibited from engaging in certain business activities.
-The firm may be broken into two or more competing firms.

question

True or false: Price discrimination is not practiced very often in the US economy.

answer

false

question

Which of the following explains why a pure monopolist is able to maintain an economic profit in the long run?

answer

There are no new entrants to increase supply, drive down price, and eliminate profit.

question

With a natural monopoly the demand curve intersects the long-run average total cost curve where the long-run average total cost curve is still_______

answer

declining, falling, decreasing, or lower

question

The practice of charging different prices to different buyers for a specific product is known as price

answer

discrimination

question

If the objective of government is to achieve allocative efficiency, what kind of price should government establish for the monopolist?

answer

one that is equal to its marginal cost

question

Select all that apply
Which of the following are conditions necessary for price discrimination?

answer

No resale
Monopoly power
Market segregation

question

As an example of price discrimination, airlines charge higher fares to business travelers whose demand for travel is _______ and offer lower, more restricted fares to vacationers and others with more ______ demand.

answer

inelastic, elastic

question

Two solutions to the economic losses caused by socially optimal pricing are providing public _________ and condoning price discrimination.

answer

subsidy

question

Price_________ , or charging different prices to different consumers, is widely practiced in the US economy.

answer

discrimination

question

In general, as shown in the figure, a fair return price will lead to ______ and a socially optimal price will lead to ______.

answer

normal profit; economic loss

question

The demand curve intersects the natural monopolist's long-run average total cost curve at a point where long-run average total costs are still falling, due to ______.

answer

economies of scale

question

If the objective of government is to achieve _________ efficiency, it should establish a legal price for the monopolist that is equal to its marginal cost.

answer

allocative

question

Market segregation must exist in order for a monopolist to ______.

answer

price discriminate

question

Select all that apply
Which of the following are potential solutions to the economic losses incurred by a regulated monopoly caused by socially optimal pricing?

answer

Price discrimination
Public subsidies

question

Select all that apply
A regulated monopoly is likely to suffer losses when ______.

answer

price is set to achieve the most efficient allocation of resources
price is set to marginal cost (P = MC)

1 of 54

question

Which of the following exists when a single firm is the sole producer of a product for which there are no close substitutes?

answer

pure monopoly

question

________ utilities are government owned or regulated.

answer

Public

question

What is the term for factors that prohibit firms from entering an industry?

answer

Barriers to entry

question

Economies of scale refer to ______ average total costs with added firm size.

answer

declining

question

Government creates_________ barriers to entry.

answer

legal

question

A pure monopoly exists when a single firm is the sole producer of a product for which there are no close ___.

answer

substitutes

question

answer

control of a key source

question

Select all that apply
Which of the following are characteristics of public utilities?

answer

- Monopolies or near monopolies
-Government owned or regulated

question

Slashing prices is an example of an entry barrier created by a(n)

answer

monopoly

question

The strongest barriers to entry effectively block all ______.

answer

potential competition

question

Select all that apply
Which of the following are assumptions made in the model of pure monopoly?

answer

question

What term is used to describe declining average total costs with added firm size?

answer

economies of scale

question

The change in total revenue associated with a one-unit change in output is called______ revenue.

answer

marginal

question

_______create(s) legal barriers to entry.

answer

government

question

Price makers are firms with:

answer

downward sloping demand curves

question

______ of essential property is a barrier to entry into an industry.

answer

control

question

Select all that apply
Which of the following are entry barriers created by monopolists?

answer

-Increased advertising
-Price reductions

question

How much will a profit-seeking monopolist produce if producing is preferable to shutting down?

answer

Up to the output at which marginal revenue equals marginal cost

question

Patents, economies of scale, and resource ownership are all assumptions of the pure ______ model

answer

monopoly, or monopolisitc

question

Which of the following does the monopolist not have?

answer

a supply curve

question

Marginal revenue is the change in ______ revenue associated with a single-unit change in output.

answer

total

question

Why might a monopolist accept a less-than-maximum per-unit profit?

answer

Additional sales more than compensate for the lower profit per unit.

question

Firms with downward-sloping product demand curves are called price

answer

makers, setters, or maker

question

Which of the following explains why a pure monopolist is able to maintain an economic profit in the long run?

answer

There are no new entrants to increase supply, drive down price, and eliminate profit.

question

A monopolist will never choose a price-quantity combination where price reductions cause:

answer

a decrease in total revenue

question

A monopolist does not achieve productive efficiency because it produces a level of output that does not correspond to the minimum point of the ______-_______ cost curve.

answer

average total

question

When a monopolist charges a higher price than a purely competitive firm would, the monopolist essentially ______.

answer

levies a private tax on consumers

question

Select all that apply
A monopolist does not have a supply curve because:

answer

- it does not equate price with marginal cost
-there is no single, unique price associated with each level of output.

question

X-inefficiency occurs when a firm operates at a cost that is _______(higher/lower) than the lowest cost for a particular level of output.

answer

Higher, greater, or more

question

The monopolist seeks maximum_______ profit, not maximum unit profit.

answer

total

question

The government broke up Standard Oil in 1911 due to its breach of _____ laws

answer

antitrust

question

A(n) ______ is able to maintain an economic profit in the long run because there are no new entrants to increase supply, drive down price, and eliminate economic profit.
Multiple choice question.

answer

monopoly

question

The monopolist's level of output is not at the minimum point of ______, meaning it will not be productively efficient.

answer

average total cost

question

What is the term used to refer to charging different prices to different buyers of a specific product?

answer

price discrimination

question

How does a monopoly generally transfer income?

answer

From consumers to the owners of the monopoly

question

Market segregation must exist in order for a monopolist to ______.

answer

price discriminate

question

When a firm produces a specific output level at a higher cost than the necessary cost for that level of output, it is called ______.

answer

x-innefficeny

question

answer

price discrimination

question

Select all that apply
If a firm is found guilty of achieving a monopoly through anticompetitive actions, then which of the following may occur?

answer

-The firm may be expressly prohibited from engaging in certain business activities.
-The firm may be broken into two or more competing firms.

question

True or false: Price discrimination is not practiced very often in the US economy.

answer

false

question

Which of the following explains why a pure monopolist is able to maintain an economic profit in the long run?

answer

There are no new entrants to increase supply, drive down price, and eliminate profit.

question

With a natural monopoly the demand curve intersects the long-run average total cost curve where the long-run average total cost curve is still_______

answer

declining, falling, decreasing, or lower

question

The practice of charging different prices to different buyers for a specific product is known as price

answer

discrimination

question

If the objective of government is to achieve allocative efficiency, what kind of price should government establish for the monopolist?

answer

one that is equal to its marginal cost

question

Select all that apply
Which of the following are conditions necessary for price discrimination?

answer

No resale
Monopoly power
Market segregation

question

answer

inelastic, elastic

question

Two solutions to the economic losses caused by socially optimal pricing are providing public _________ and condoning price discrimination.

answer

subsidy

question

Price_________ , or charging different prices to different consumers, is widely practiced in the US economy.

answer

discrimination

question

In general, as shown in the figure, a fair return price will lead to ______ and a socially optimal price will lead to ______.

answer

normal profit; economic loss

question

The demand curve intersects the natural monopolist's long-run average total cost curve at a point where long-run average total costs are still falling, due to ______.

answer

economies of scale

question

If the objective of government is to achieve _________ efficiency, it should establish a legal price for the monopolist that is equal to its marginal cost.

answer

allocative

question

Market segregation must exist in order for a monopolist to ______.

answer

price discriminate

question

Select all that apply
Which of the following are potential solutions to the economic losses incurred by a regulated monopoly caused by socially optimal pricing?

answer

Price discrimination
Public subsidies

question

Select all that apply
A regulated monopoly is likely to suffer losses when ______.

answer

price is set to achieve the most efficient allocation of resources
price is set to marginal cost (P = MC)

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