16 Monopoly CLICKER QUESTIONS Notes and teaching tips: 3, 4, 5, 6, 7, 13, 16, 17, 19, 20, 22. 2

Checkpoint 16.1 Checkpoint 16.3 Checkpoint 16.5 Checkpoint 16.2 Question 1 Question 5 Question 9 Question 6 Question 2 Question 10 Checkpoint 16.2 Checkpoint 16.4 Question 3 Question 7 Question 4 Question 8

CHECKPOINT 16.1 Question 1 A natural monopoly is one that arises from _______, patent law copyright law a firm buying up all of a natural resource economies of scale ownership of a natural resource Answer: D

CHECKPOINT 16.1 Question 2 A local pizza producer charges one price for a single pizza and almost gives away a second one. This is an example of _____. monopoly a barrier to entry behavior that is not profit-maximizing price discrimination rent seeking Answer: D

CHECKPOINT 16.2 Question 3 A single-price monopoly can sell 1 unit for $9.00, but to sell 2 units, the price must be cut to $8.50 per unit. The marginal revenue from selling the second unit is ____. $17.50 $17.00 $8.50 $8.00 $9.00 Answer: D

CHECKPOINT 16.2 Question 4 To maximize profit, a single-price monopoly produces the quantity at which ________. marginal revenue exceeds marginal cost by the largest possible amount marginal revenue is equal to marginal cost average total cost is at its minimum the marginal cost equal the market price marginal revenue is zero Answer: B

CHECKPOINT 16.3 Question 5 Comparing single-price monopoly to perfect competition, with monopoly ______. the consumer surplus is larger the total surplus is larger there is no consumer surplus the total surplus is smaller the consumer surplus is smaller, but the total surplus is the same Answer: D

CHECKPOINT 16.3 Question 6 In equilibrium, rent seeking eliminates the ______. deadweight loss economic profit consumer surplus demand for the product opportunity to price discriminate Answer: B

CHECKPOINT 16.4 Question 7 When a monopoly price discriminates, it ________. increases the amount of consumer surplus decreases its economic profit converts consumer surplus into economic profit converts economic profit into consumer surplus has no effect on the deadweight loss Answer: C

CHECKPOINT 16.4 Question 8 With perfect price discrimination, the quantity of output produced by the monopoly ____ the quantity produced by a perfectly competitive industry. is greater than is less than is equal to is not comparable to might be greater than or equal to Answer: C

CHECKPOINT 16.5 Question 9 When regulators require a natural monopoly to set a price that is equal to marginal cost, the firm produces _______ quantity and ________. the efficient; makes zero economic profit an inefficient; makes a positive economic profit the efficient; incurs an economic loss an inefficient; incurs an economic loss an inefficient; makes zero economic profit Answer: A

CHECKPOINT 16.5 Question 10 If the natural monopoly illustrated in the figure was regulated using an average cost pricing rule, the price would be ____. $100 between $100.01 and $200.00 between $200.01 and $300.00 between $300.01 and $400.00 more than $400.01 Answer: B