Econ 102 Actual Exam Questions and CORRECT Answers
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Course
Econ 102
Institution
Econ 102
Econ 102 Actual Exam Questions and
CORRECT Answers
Which of the following would be most likely to have monopoly powers? - CORRECT
ANSWER- A municipal water company
Which of the following is an example of a barrier to entry? - CORRECT ANSWER-
Larry obtains a copyright for the new computer gam...
Econ 102 Actual Exam Questions and
CORRECT Answers
Which of the following would be most likely to have monopoly powers? - CORRECT
ANSWER✔✔- A municipal water company
Which of the following is an example of a barrier to entry? - CORRECT ANSWER✔✔-
Larry obtains a copyright for the new computer game that he invented.
The defining characteristic of natural monopoly is? - CORRECT ANSWER✔✔- Economies
of scale over the relevant range of output.
Suppose a firm has a monopoly on the scale of a computer game and faces a downward-
sloping demand curve. When selling the 36th game, the firm will always receive? -
CORRECT ANSWER✔✔- Less marginal revenue on the 36th game than it received on the
35th game.
A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units
of output for $43.60 per unit. The marginal revenue of output is? - CORRECT
ANSWER✔✔- -$376.40
Which of the following statements is correct? - CORRECT ANSWER✔✔- Panel B
represents the typical demand curve for a perfectly competitive firm, and Panel A represents
the typical demand curve for a monopoly.
In order to maximize profits, the monopolist should produce? - CORRECT ANSWER✔✔- 12
units
In order to maximize profits, the monopolist should charge a price of? - CORRECT
ANSWER✔✔- $20
If the monopolist produces 5 units, what is it average revenue? - CORRECT ANSWER✔✔-
$18
, What price should the firm charge to maximize profit? - CORRECT ANSWER✔✔- $7
A monopolist will choose to increase output when? - CORRECT ANSWER✔✔- At the
present level of output, marginal revenue exceeds marginal cost.
Suppose a monopolist charges a price of $27 for its product and sells 10 units at that price. At
10 units of production, the firm has an average fixed cost equal to $10 and an average
variable cost equal to $13. How much total profit is the firm earning at this price? -
CORRECT ANSWER✔✔- $40
Based upon the information shown, what is the total revenue for Bearclaws, given that it
maximizes profits? - CORRECT ANSWER✔✔- $980
The marginal revenue curve for a monopoly firm is depicted by curve? - CORRECT
ANSWER✔✔- A
Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will
it obtain? - CORRECT ANSWER✔✔- $280
The deadweight loss that arises from a monopoly is a consequence of the fact that the
monopoly... - CORRECT ANSWER✔✔- Quantity is lower than the socially optimal quantity
The deadweight loss caused by a profit-maximizing monopoly amounts to? - CORRECT
ANSWER✔✔- $500
A benevolent social planner would have the monopoly operate at an output level... -
CORRECT ANSWER✔✔- Equal to Q0
If the monopoly operates at an output level less than Q0, then an increase in output toward
(but not exceeding) Q0 would? - CORRECT ANSWER✔✔- Lower the price and raise total
surplus
Price discrimination requires the firm to? - CORRECT ANSWER✔✔- Separate customers
according to their willingness to pay.
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