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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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 $ and $200.00
between $ and $300.00
between $ and $400.00
more than $400.01
Answer: B