Economics MCQs

Page No. 297

The monopolist’s supply curve ?


adoes not exist

✓


b is the marginal cost curve above average variable cost

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cis the marginal cost curve above average total cost

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dThe upward-sloping portion of the average variable cost

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View Answer does not exist

The inefficiency associated with monopoly is due to ?


aunderproduction of the good

✓


bthe monopoly’s profits

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cthe monopoly’s losses

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doverproduction of the good

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Thomas is a monopolist in the production of your textbook because ?


aThomson has a legally protected exclusive right to produce this textbook

✓


bThomson owns a key resource in the production of textbooks.

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cThomson is a natural monopoly,

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dThomson is a very large company

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Which of the following statements about price and marginal cost in competitive and monopolized markets is true ?


aIn competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.

✓


b In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost

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cIn competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost

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d In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost

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When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?


abelow the price because the price effect outweighs the output effect

✓


b above the price because the output effect outweighs the price effect

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c above the price because the price effect outweighs the output effect

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dbelow the price because the output effect outweighs the price effect

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Which of the following is not a barrier to entry in a monopolized market ?


aA single firm is very large

✓


bThe government gives a single firm the exclusive right to produce some good

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cThe costs of production make a single producer more efficient than a large number of productions

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dA key resource is owned by a single firm

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A welfare loss occurs in monopoly where ?


aThe price is greater than the marginal cost

✓


bThe price is greater than the marginal benefit

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cThe price is greater than the average revenue

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d The price is greater than the marginal revenue

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In monopoly which of the following is true ?


aThere are many buyers and sellers

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b There is one main buyer

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c There is one main seller

✓


dThe actions of one firm do not affect the market price and quantity

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Barriers to entry do not include ?


a Patents

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b Internal economies of scale

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cMobility of resources

✓


dHigh investment costs

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View Answer Mobility of resources

In monopoly when abnormal profits are made ?


aThe price set is greater than the marginal cost

✓


bThe price is less than the average cost

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c The average revenue equals the marginal cost

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dRevenue equals total cost

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