Multiple Choice Questions On Monoply Microeconomics.
Q.5. Under perfect price discrimination:
(A) Consumer surplus is zero
(B) Consumers are exploited
(C) The Monopolist makes zero profit
Q.6. Under ordinary price discrimination, the Monopolist charges a higher price with:
(A) Rich consumers
(B) Low elasticity of demand
(C) High elasticity of demand
(D) Lots of consumers
Q.7. All forms of price discriminate are intended to:
(A) Maximize sales
(B) Minimize transaction costs
(C) Make some consumer feel superior
(D) Maximize profits
Q.8. Price discrimination is possible in_______ Market.
(A) Perfect competition
(B) Monopoly
(C) Monopolistic competition
Q.9. A firm will find it difficult to engage in price discrimination if:
(A) The good is normal
(B) There are many consumers
(C) There are close substitutes
(D) None of above
Q.10. What does the long-run average cost curve show?
A) the lowest average cost to produce each output level in the long run
B) the interaction between average fixed cost and marginal cost
C) the distinction between long-run fixed and long-run variable costs
D) the lowest average marginal cost of producing each output level at any time.
Q.11. The long-run average cost curve
A) is constructed using the short-run marginal cost curves.
B) is an upside down U-shape.
C) shows economies and diseconomies of scale.
D) Both answer A and answer B are correct.
Q.12. A budget line:
A) has a slope equal to a relative price.
B) shows the limits to what can be consumed.
C) Answers A and B are both correct
D) None of these
Q.13. Any attempt to capture a consumer surplus, a producer surplus, or an economic profit is called
(A) efficiency gain.
(B) profit-maximizing.
(C) rent-seeking.
(D) price discriminating.
Q.14. Efforts by a firm to obtain a monopoly
(A) are called price taking.
(B) are called price discrimination.
(C) raise consumer surplus.
(D) are called rent seeking.
Q.15. Activity aimed at creating artificial barriers to entry to a particular market
(A) improves competition.
(B) is rent seeking.
(C) has no social cost
(D) improves the economy's efficiency.
Q.16. Rent seeking is devoted to the creation of
(A) more elastic demand.
(B) monopolies.
(C) human capital.
(D) competitive industries.
Q.17. Which of the following statements about a monopoly is FALSE?
(A) A monopoly is the only supplier of the good.
(B) Monopolies have no barriers to entry or exit.
(C) The good produced by a monopoly has no close substitutes.
(D) None of the above; that is, all of the above answers are true statements about a monopoly.
Q.18. Which of the following is LEAST likely to be a monopoly?
(A) the sole owner of an occupational license
(B) a pharmaceutical company with a patent on a drug
(C) a store in a large shopping mall
(D) the holder of a public franchise
Q.19. A public franchise is
(A) an exclusive right granted to an inventor of a product.
(B) a government issued license required to practice a profession.
(C) a unique source of raw materials.
(D) an exclusive right granted to a firm to supply a good or service.
Q.20. Public franchises create monopolies by restricting
(A) entry.
(B) demand.
(C) prices.
(D) profit.
Q.21. A patent grants
(A) a guarantee of quality to consumers.
(B) an exclusive right to an inventor of a product.
(C) the right to practice a profession.
(D) control over a unique source or supply of raw materials.
Q.22. Patents create monopolies by restricting
(A) prices.
(B) profit.
(C) entry.
(D) demand.
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