Monopoly SAMPLE MCQ - UOL Intro to Econs Exam Tuition

UOL SAMPLE MCQ On MICRO ECONOMICS - Monopoly  

1) Unregulated monopolies

A) cannot change the market quantity.

B) can influence the market quantity and price.

C) cannot incorporate.

D) take the market price as given.

2) The following are key features of a monopoly EXCEPT

A) diseconomies of scale.

B) no close substitutes.

C) influence over price.

D) barriers to entry

3) 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.

4) Monopolists

A) face downward sloping demand curves.

B) are price takers.

C) have no short-run fixed costs.

D) maximize revenue, not profits.

5) If the price elasticity of demand is less than 1, a monopoly's

A) marginal revenue is undefined.

B) total revenue decreases when the firm lowers its price.

C) total revenue increases when the firm lowers its price.

D) marginal revenue is zero.

6) Which of the following statements is true?

A) A perfectly competitive industry produces more output and charges the same price as a single-price monopoly.

B) A perfectly competitive industry produces less output but charges a lower price than a single-price monopoly.

C) A perfectly competitive industry produces less output and charges the same price as a single-price monopoly.

D) A perfectly competitive industry produces more output and charges a lower price than a single-price monopoly.

7) When an increase in the range of goods produced brings a decrease in the average total cost of production, the firm is experiencing

A) diminishing returns.

B) economies of scale.

C) economies of scope.

D) diseconomies of scale

8) Which of the following is NOT a possible gain to society from a monopoly?

A) The monopoly may induce innovation.

B) The monopoly may achieve economies of scope.

C) The monopoly may create rent seeking.

D) The monopoly may achieve economies of scale

9) Which of the following statements regarding a marginal-cost pricing rule is incorrect?

A) It is efficient.

B) It allows the firm to earn a normal profit.

C) It maximizes total surplus in a regulated industry.

D) It sets price equal to marginal cost.

10) Which of the following may be a gain to society from monopoly?

A) Monopolies may be able to generate economies of scale.

B) Monopolies may earn an economic profit in the long run.

C) Monopolies may be able to price discriminate, thereby boosting consumer surplus.

D) Monopolists do not waste resources trying to innovate.

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