Need answers to all 42 questions please. the whole thing!

Q1 A monopoly is characterized by low prices and high production a) True b) False Q2 We know that a monopolistic market is not allocatively efficient because monopolist produces and sells quantity in which: a) MR does not equal MC b) P does not equal MC c) P does not equal minimum ATC d) consumer surplus is negative Q3 We know that a monopolistic market is not productively efficient because monopolist produces and sells an output in which: a) MR does not equal MC b) p does not equal MC c) P does not equal minimum ATC d) consumer surplus is negative Q4 When the per-person value of a product rises with the total number of users of the product, that product has the property of: a) simultaneous consumption b) network effect c) X-inefficiency d) rent-seeking behavior Q5 Suppose that a monopolist is selling 50,000 units at a price of $1,000. They are paying $20 million in wages and $15 million in raw materials. The factory and equipment that they are renting (through an annual contract) costs $25 million. What happens in the short run in this market? a) Monopolist would continue producing b) Monopolist would shut down production c) Monopolist would charge the highest price possible Q6 Suppose that a monopolist is selling 50,000 units at a price of $1,000. They are paying $20 million in wages and $15 million in raw materials. The factory and equipment that they are renting (through an annual contract) costs $25 million. What happens in the long run in this market? a) Monopolist would exit market b) Entrepreneurs would enter market c) Neither of the above * Use the graph to answer Questions Q7 through Q18, The graph represents the market situation that a monopolist faces. Use the graph to answer the following questions 5100 590 MC 580 570 550 $50 540 530 D 520 530 MR 50 15 10 Outut Quantity Q7 What quantity will the monopolist produce? a) 0 b) 6 c) 9 d) 10 Q8 What price will the monopolist charge? a) $100 b) $70 c) $55 d) $40 09 What is the producer surplus (iemonopolist's profit)? Hint: The area of polygon below price and above supply, up until a) $202.5 b) $270 c) $90 d) $45 Q10 What is the consumer surplus? Hint: Area of triangle below demand and above price, up until at a) $2025 b) $270 c) S90 d) $45 Q11 What is the deadweight loss? a) $202.5 b) $270 c) $90 d) $45 5300 590 590 MC 570 560 550 540 550 D 520 510 MR 50 0 20 10 15 Output Quantity *** Suppose that the monopolist is replaced with many firms, and this market becomes purely competitive. The marginal cost and demand curves remain the same. Q12 What is the new market quantity (under pure competition)? a) b) 6 c) 9 d) 10 Q13 What is the new market price (under pure competition)? a) $100 b) $70 c) $55 d) $40 Q14 What is the new producer surplus (under pure competition)? a) $202.5 b) $270 c) $90 d) $45 Q15 What is the new consumer surplus (under pure competition)? a) $202.5 b) $270 c) $90 d) $45 Q16 Refer to your answers to Questions Q10 and 015. Compared to pure competition, consumers face a(n) consumer surplus with a monopoly. a) lower b) higher c) unchanged Q17 Refer to your answers to Questions 09 and 214. Compared to pure competition, producer(s) face an) producer surplus with a monopoly. a) lower b) higher c) unchanged Q18 Refer to your answer to Question Q11. Compared to pure competition, society faces a(n) total surplus with a monopoly a) lower b) higher c) unchanged Q1 When a firm spends resources in an attempt to transfer income from consumers to themselves, we say that the firm exhibits: a) simultaneous consumption b) network effect c) X-inefficiency d) rent-seeking behavior Q20 X-inefficiency is more likely to occur within a monopoly rather than a purely competitive firm since: a) creative destruction would remove purely competitive firm if operating inefficiently b) monopolists have less access to technological advance c) highly productive managers prefer working in a competitive firm d) monopolists tend to have more secure supply chains Q21 Barriers to entry: a) usually result in pure competition b) can result from government regulation c) exist in economic theory but not in the real world d) are typically the result of wrongdoing on the part of a firm Q22 A price-discriminating monopolist will follow a system where: a) Buyers with inelastic demand are charged higher prices than buyers with elastic demand b) Buyers with inelastic demand are charged lower prices than buyers with elastic demand c) All buyers are charged the same price regardless of their elasticity of demand d) The price of the product is held the same even if the demand changes uw to answer Questions 023 through 028. Graph B 570 565 $60 555 MC 550 AT 545 340 $35 $30 525 $20 Sts d 510 MR 55 so 248 10 12 14 16 18 20 22 24 24 3 3 2 3 3 3 0 43 44 45 450 Output Quantity Q23 What quantity would the monopolist sell? Hint: Slide 8 a) 10 b) 16 c) 18 d) 24 Q24 What price will the monopolist charge? Hint: Slide 8 a) $70 b) $50 c) $30 d) $25 Q25 What is this monopolist's economic profit? Hint: Slides 9 through 11 a)-$80 b) $0 c) $240 d) $320 e) $400 Q26 What would happen in the long run? a) Monopolist would exit market b) Entrepreneurs would enter market c) Neither of the above. Q27 Suppose the government regulates the monopoly. What is the "socially optimal price? Hint: Slide 22 a) S40 b) $33 c) $30 d) $25 028 Refer to the graph on the previous page. Suppose the government regulates the monopoly. What is the "fair-return" price? Hint: Slide 22 a) $40 b) $33 c) $30 d) $25 * For Questions 029 through 31, assume that Portlandia's only goal is economic efficiency. Hint: Refer directly to Slide 21. 229 A new city, Portlandia, has been founded. The town leaders are deciding how to handle the matter of electricity generation and transmission. A consultant comes to the meeting and states, "At the moment, Powerall is the sole supplier of electricity. It is important to keep in mind that the electricity industry exhibits economy of scale." What course of action would you recommend to the leaders of Portlandia regarding Power All? a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks Q30 A single firm, Otnasnom, owns all of the food-producing land in Portlandia. Since there is no trade in and out of Portlandia, the firm has a monopoly on the city's food market. What course of action would you recommend to the leaders of Portlandia? Explain why. a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks Q31 Portlandia only has one movie theater, Burton's Vids, and there is not another movie theater within reasonable driving distance. The advent of video vending machines and online streaming/downloading is causing demand for the theater to decrease. The owner of Burton's Vids appeals to the city's council, saying "unless I get some special tax breaks, I'm going to have to shut down the company and lay off 6 employees." What course of action would you recommend to the leaders of Portlandia? Explain why. a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks able to answer Questions Q32 through 36: Total Revenue Marginal Revenue Quantity 0 1 2 3 4 5 6 3 Price $1000 $900 $800 $700 $600 $500 $400 Q32 What is the marginal revenue of the 2nd unit? a) $700 b) $800 c) $1,600 d) $2,500 Q33 What is the total revenue when selling 5 units? a) $700 b) $800 c) $1,600 d) $2,500 ***Suppose it costs $300 to produce each unit, such that MC = ATC = 300. *** Q34 What price would the monopolist charge? $ Hint: Perform a marginal analysis to determine optimal quantity a) $1,000 b) $800 c) $600 d) $400 Q35 What is the monopolist's profit? $ Hint: Find out Total Cost by multiplying cost of producing each unit by the number of units produced a) $1,200 b) $800 c) $400 d) So e) $400 Q36 Suppose the monopolist has fixed costs of $1,000 (in addition to MC=$300), would the monopolist exit the market in the long run? Would entrepreneurs enter the market? a) Monopolist exits. b) Entrepreneurs enter. c) Neither of the above would occur. 037 A casino obtains the only license to operate in the state of Maine, and legislators will not issue any more. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale 038 The manufacturing of microprocessors is only efficient when carried out in operations of a very large magnitude. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale 039 In the small island nation of Castaway Atoll, there is only one movie theater: VideoPlex. An entrepreneur considers building and operating a rival movie theater. The entrepreneur receives a message from the owner of VideoPlex: "If you choose to build this movie theater, I will significantly lower my prices in response, making it impossible for you to make any profit whilst competing with me." Upon learning this, the entrepreneur decides not to enter the market. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale Q40 In the early 1900's, the organization De Beers was in possession of 90% of the world's diamond supplies. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale Q41 What is the primary advantage of the patenting system from society's perspective? Hint: Use class notes, beware of Google as it answers this question from the firm's perspective. a) Firms and inventors make larger profits. b) Consistent record-keeping leads to better quality and dissemination of information c) Allows innovations to move faster from 'design' to 'production through economy of scale. d) Incentivizes technological advancement by granting monopoly profits to innovators. Q42 What is the primary disadvantage of the patenting system from society's perspective? Hint: Use class notes, beware of Google as it answers this question from the firm's perspective a) Excessive administration costs place a financial burden on the government/taxpayers, b) Centralized information network makes it easier for competitors to steal ideas. c) Consumers are forced to pay monopoly prices on newly innovated products. d) Patent clerks and lawyers are valuable resources that could be used elsewhere in society. Q1 A monopoly is characterized by low prices and high production a) True b) False Q2 We know that a monopolistic market is not allocatively efficient because monopolist produces and sells quantity in which: a) MR does not equal MC b) P does not equal MC c) P does not equal minimum ATC d) consumer surplus is negative Q3 We know that a monopolistic market is not productively efficient because monopolist produces and sells an output in which: a) MR does not equal MC b) p does not equal MC c) P does not equal minimum ATC d) consumer surplus is negative Q4 When the per-person value of a product rises with the total number of users of the product, that product has the property of: a) simultaneous consumption b) network effect c) X-inefficiency d) rent-seeking behavior Q5 Suppose that a monopolist is selling 50,000 units at a price of $1,000. They are paying $20 million in wages and $15 million in raw materials. The factory and equipment that they are renting (through an annual contract) costs $25 million. What happens in the short run in this market? a) Monopolist would continue producing b) Monopolist would shut down production c) Monopolist would charge the highest price possible Q6 Suppose that a monopolist is selling 50,000 units at a price of $1,000. They are paying $20 million in wages and $15 million in raw materials. The factory and equipment that they are renting (through an annual contract) costs $25 million. What happens in the long run in this market? a) Monopolist would exit market b) Entrepreneurs would enter market c) Neither of the above * Use the graph to answer Questions Q7 through Q18, The graph represents the market situation that a monopolist faces. Use the graph to answer the following questions 5100 590 MC 580 570 550 $50 540 530 D 520 530 MR 50 15 10 Outut Quantity Q7 What quantity will the monopolist produce? a) 0 b) 6 c) 9 d) 10 Q8 What price will the monopolist charge? a) $100 b) $70 c) $55 d) $40 09 What is the producer surplus (iemonopolist's profit)? Hint: The area of polygon below price and above supply, up until a) $202.5 b) $270 c) $90 d) $45 Q10 What is the consumer surplus? Hint: Area of triangle below demand and above price, up until at a) $2025 b) $270 c) S90 d) $45 Q11 What is the deadweight loss? a) $202.5 b) $270 c) $90 d) $45 5300 590 590 MC 570 560 550 540 550 D 520 510 MR 50 0 20 10 15 Output Quantity *** Suppose that the monopolist is replaced with many firms, and this market becomes purely competitive. The marginal cost and demand curves remain the same. Q12 What is the new market quantity (under pure competition)? a) b) 6 c) 9 d) 10 Q13 What is the new market price (under pure competition)? a) $100 b) $70 c) $55 d) $40 Q14 What is the new producer surplus (under pure competition)? a) $202.5 b) $270 c) $90 d) $45 Q15 What is the new consumer surplus (under pure competition)? a) $202.5 b) $270 c) $90 d) $45 Q16 Refer to your answers to Questions Q10 and 015. Compared to pure competition, consumers face a(n) consumer surplus with a monopoly. a) lower b) higher c) unchanged Q17 Refer to your answers to Questions 09 and 214. Compared to pure competition, producer(s) face an) producer surplus with a monopoly. a) lower b) higher c) unchanged Q18 Refer to your answer to Question Q11. Compared to pure competition, society faces a(n) total surplus with a monopoly a) lower b) higher c) unchanged Q1 When a firm spends resources in an attempt to transfer income from consumers to themselves, we say that the firm exhibits: a) simultaneous consumption b) network effect c) X-inefficiency d) rent-seeking behavior Q20 X-inefficiency is more likely to occur within a monopoly rather than a purely competitive firm since: a) creative destruction would remove purely competitive firm if operating inefficiently b) monopolists have less access to technological advance c) highly productive managers prefer working in a competitive firm d) monopolists tend to have more secure supply chains Q21 Barriers to entry: a) usually result in pure competition b) can result from government regulation c) exist in economic theory but not in the real world d) are typically the result of wrongdoing on the part of a firm Q22 A price-discriminating monopolist will follow a system where: a) Buyers with inelastic demand are charged higher prices than buyers with elastic demand b) Buyers with inelastic demand are charged lower prices than buyers with elastic demand c) All buyers are charged the same price regardless of their elasticity of demand d) The price of the product is held the same even if the demand changes uw to answer Questions 023 through 028. Graph B 570 565 $60 555 MC 550 AT 545 340 $35 $30 525 $20 Sts d 510 MR 55 so 248 10 12 14 16 18 20 22 24 24 3 3 2 3 3 3 0 43 44 45 450 Output Quantity Q23 What quantity would the monopolist sell? Hint: Slide 8 a) 10 b) 16 c) 18 d) 24 Q24 What price will the monopolist charge? Hint: Slide 8 a) $70 b) $50 c) $30 d) $25 Q25 What is this monopolist's economic profit? Hint: Slides 9 through 11 a)-$80 b) $0 c) $240 d) $320 e) $400 Q26 What would happen in the long run? a) Monopolist would exit market b) Entrepreneurs would enter market c) Neither of the above. Q27 Suppose the government regulates the monopoly. What is the "socially optimal price? Hint: Slide 22 a) S40 b) $33 c) $30 d) $25 028 Refer to the graph on the previous page. Suppose the government regulates the monopoly. What is the "fair-return" price? Hint: Slide 22 a) $40 b) $33 c) $30 d) $25 * For Questions 029 through 31, assume that Portlandia's only goal is economic efficiency. Hint: Refer directly to Slide 21. 229 A new city, Portlandia, has been founded. The town leaders are deciding how to handle the matter of electricity generation and transmission. A consultant comes to the meeting and states, "At the moment, Powerall is the sole supplier of electricity. It is important to keep in mind that the electricity industry exhibits economy of scale." What course of action would you recommend to the leaders of Portlandia regarding Power All? a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks Q30 A single firm, Otnasnom, owns all of the food-producing land in Portlandia. Since there is no trade in and out of Portlandia, the firm has a monopoly on the city's food market. What course of action would you recommend to the leaders of Portlandia? Explain why. a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks Q31 Portlandia only has one movie theater, Burton's Vids, and there is not another movie theater within reasonable driving distance. The advent of video vending machines and online streaming/downloading is causing demand for the theater to decrease. The owner of Burton's Vids appeals to the city's council, saying "unless I get some special tax breaks, I'm going to have to shut down the company and lay off 6 employees." What course of action would you recommend to the leaders of Portlandia? Explain why. a) Destroy monopoly by utilizing antitrust law b) Allow monopoly to exist, but regulate its price and operations c) Ignore the monopoly, allow for creative destruction d) Provide special tax breaks able to answer Questions Q32 through 36: Total Revenue Marginal Revenue Quantity 0 1 2 3 4 5 6 3 Price $1000 $900 $800 $700 $600 $500 $400 Q32 What is the marginal revenue of the 2nd unit? a) $700 b) $800 c) $1,600 d) $2,500 Q33 What is the total revenue when selling 5 units? a) $700 b) $800 c) $1,600 d) $2,500 ***Suppose it costs $300 to produce each unit, such that MC = ATC = 300. *** Q34 What price would the monopolist charge? $ Hint: Perform a marginal analysis to determine optimal quantity a) $1,000 b) $800 c) $600 d) $400 Q35 What is the monopolist's profit? $ Hint: Find out Total Cost by multiplying cost of producing each unit by the number of units produced a) $1,200 b) $800 c) $400 d) So e) $400 Q36 Suppose the monopolist has fixed costs of $1,000 (in addition to MC=$300), would the monopolist exit the market in the long run? Would entrepreneurs enter the market? a) Monopolist exits. b) Entrepreneurs enter. c) Neither of the above would occur. 037 A casino obtains the only license to operate in the state of Maine, and legislators will not issue any more. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale 038 The manufacturing of microprocessors is only efficient when carried out in operations of a very large magnitude. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale 039 In the small island nation of Castaway Atoll, there is only one movie theater: VideoPlex. An entrepreneur considers building and operating a rival movie theater. The entrepreneur receives a message from the owner of VideoPlex: "If you choose to build this movie theater, I will significantly lower my prices in response, making it impossible for you to make any profit whilst competing with me." Upon learning this, the entrepreneur decides not to enter the market. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale Q40 In the early 1900's, the organization De Beers was in possession of 90% of the world's diamond supplies. Which of the following options best describes this barrier to entry? a) Predatory pricing strategy b) Ownership of natural resources c) Legal barrier d) Economy of scale Q41 What is the primary advantage of the patenting system from society's perspective? Hint: Use class notes, beware of Google as it answers this question from the firm's perspective. a) Firms and inventors make larger profits. b) Consistent record-keeping leads to better quality and dissemination of information c) Allows innovations to move faster from 'design' to 'production through economy of scale. d) Incentivizes technological advancement by granting monopoly profits to innovators. Q42 What is the primary disadvantage of the patenting system from society's perspective? Hint: Use class notes, beware of Google as it answers this question from the firm's perspective a) Excessive administration costs place a financial burden on the government/taxpayers, b) Centralized information network makes it easier for competitors to steal ideas. c) Consumers are forced to pay monopoly prices on newly innovated products. d) Patent clerks and lawyers are valuable resources that could be used elsewhere in society