A monopolist is able to maximize its profits by:

Question 1 options:

1)	setting the price at the level that will maximize its per-unit profit

2)	producing output where MR = MC and charging a price along the demand curve

3)	setting output at MR = MC and setting price at the demand curve's highest point

4)	producing maximum output where price is equal to its marginal cost

Question 2 (3 points)

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

Question 2 options:

1)	diminishing marginal returns

2)	marginal cost output

3)	economies of scale

4)	diseconomies of scale

Question 3 (3 points)

If the supply curve for a product is vertical, then the elasticity of supply is:

Question 3 options:

1)	equal to zero

2)	equal to one

3)	greater than one but less than infinity

4)	equal to infinity

Question 4 (3 points)

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Demand is said to be __________ when the quantity demanded changes at the same proportion as the price.

Question 4 options:

1)

elastic

2)	unit elastic

3)

inelastic

4)	independent

Question 5 (3 points)

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When demand is inelastic:

Question 5 options:

1)	Price elasticity of demand is greater than 1.

2)	Consumers are not very responsive to changes in price.

3)	The percentage change in quantity demanded resulting from a price change is greater than the percentage change in price.

4)	Demand curves appear to be fairly flat.

Question 6 (3 points)

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A firm that holds a monopoly position in the market place is:

Question 6 options:

1)	a price maker

2)	a price taker

3)	monopolistically competitive

4)	subject to infinite market forces

Question 7 (3 points)

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Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

Question 7 options:

1)	Output will be too small and its price too high.

2)	Output will be too large and its price too high.

3)	Output will be too small and its price too low.

4)	Output will be too large and its price too low.

Question 8 (3 points)

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In order to determine the average variable cost, the firm's variable costs are divided by _______________________.

Question 8 options:

1)	its' fixed costs

2)	the quantity of output

3)	its' average costs

4)	diminishing marginal costs

Question 9 (3 points)

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Intellectual property law is a body of law that includes:

Question 9 options:

1)	the right of inventors to produce their inventions

2)	the right of inventors to sell their inventions

3)	trademark, patent, and trade secret legislation

4)	copyright legislation, as well as all of the above

Question 10 (3 points)

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Demand is said to be _____________ when the quantity demanded is not very responsive to changes in price.

Question 10 options:

1)	independent

2)

inelastic

3)	unit elastic

4)

elastic

Question 11 (3 points)

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The U.S. government has registered on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily .

Question 11 options:

1)	200,00 patents; license for use

2)	800,000 trademarks; identify the source of goods

3)	1 million copyright licenses; identify the authors of creative works

4)	200,000 trade secrets; create a natural

Question 12 (3 points)

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The ______________ of all firms can be broken down into some common underlying patterns.

Question 12 options:

1)	total revenues

2)	diminishing short-run costs

3)	cost structure

4)	diminishing long-run costs

Question 13 (3 points)

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For a pure monopoly to exist;

Question 13 options:

1)	There is a single seller in a particular industry.

2)	There is only one seller, therefore no industry.

3)	There are a few sellers in a given industry.

4)	There are limited sellers in a particular industry.

Question 14 (3 points)

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____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

Question 14 options:

1)	Diminishing variable returns

2)	Diminishing average returns

3)	Diminishing marginal returns

4)	Diminishing marginal costs

Question 15 (3 points)

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When a natural monopoly exists in a given industry, the per-unit costs of production will be:

Question 15 options:

1)	lowest when there are a large number of producers in the industry

2)	lower for the smaller firms than for larger firms

3)	minimized at the output that maximizes the industry's profitability

4)	lowest when a single firm generates the entire output of the industry

Question 16 (3 points)

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Which one of the following is the most accurate description of a monopolist

Question 16 options:

1)	a sole producer of a narrowly defined product class, such as brown, Grade A eggs produced in Eagle County,

2)	a firm that is very large relative to all its competitors within a narrow product class

3)	a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry

4)	a large, multinational firm that produces a single product in a narrow product class

Question 17 (3 points)

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In economics, a firm that faces no competitors is referred to as _________________.

Question 17 options:

1)	an oligopoly

2)	a monopoly

3)	a perfect competitor

4)	an oligopolizor

Question 18 (3 points)

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Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?

Question 18 options:

1)	prices that can be charged

2)	natural monopoly

3)	conditions of entry in a certain industry

4)	quantities that can be produced

Question 19 (3 points)

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______________ include all of the costs of production that increase with the quantity produced.

Question 19 options:

1)	Fixed costs

2)	Variable costs

3)	Average costs

4)	Average variable costs

Question 20 (3 points)

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The largest cattle rancher in a given region will be unable to have a (an) if sufficient numbers of smaller cattle ranchers provide sources of competition.

Question 20 options:

1)

oligopoly

2)

patent

3)

monopoly

4)	monopolistic competition