Chapter 8 Monopoly
Multiple Choice
1. A monopoly
a. is protected by barriers to entry.
b. produces a good with no close substitutes. c. has a downward-sloping demand curve. d. All of the above answers are correct. Answer: d
2. A monopoly
a. must determine the price it will charge.
b. faces extensive competition from firms making close substitutes.
c. cannot price discriminate because such a pricing strategy is illegal in the United States. d. All of the above answers are correct. Answer: a
3. An important characteristic of monopoly is that there are ____ close substitutes for the good or service sold. a. only several b. only a few c. no
d. thousands of Answer: c
4. Monopolies arise when there are
a. many substitutes but no barriers to entry. b. no close substitutes and no barriers to entry. c. no close substitutes and barriers to entry. d. many substitutes and barriers to entry. Answer: c
5. A major characteristic of monopoly is that a. no barriers to entry exist.
b. the product is identical to that produced by other companies. c. a barrier to entry keeps out competitors. d. competition is intense. Answer: c
6. A monopoly will arise if
a. two out of three of a town’s pizzerias go out of business and only one new pizzeria opens.
b. the town council passes a law granting Nick’s Pizza the exclusive right to operate in that town.
c. Papa Joe’s Pizza becomes the largest pizza producer in town and Nick’s Pizza stays small in size.
d. several big pizza chains force several small pizzerias out of business. Answer: b
7. A natural barrier to entry is defined as a barrier that arises because of a. technology that allows production by one firm to meet an entire market. b. patents or licenses that exclude others from producing a good or service.
c. many firms producing the good and thereby allowing choice for all consumers. d. anticompetitive practices by a firm that keep other firms from producing. Answer: a
8. Natural barriers arise when, over the relevant range of output, there are a. diseconomies of scale. b. constant returns to scale.
c. several firms who produce at the lowest average cost. d. economies of scale. Answer: d
9. For a natural monopoly, economies of scale a. exist over the entire long-run average cost curve.
b. and diseconomies of scale exist over the entire long-run average cost curve. c. cause legal barriers of entry.
d. as well as constant returns to scale and diseconomies of scale exist over the entire long-run average cost curve. Answer: a
10. A natural monopoly arises when
a. a firm controls the supply of a unique resource. b. a firm has many small firms that they can control. c. there are firms which act together as a monopoly.
d. the long-run average cost curve slopes downward until it crosses the demand curve. Answer: d
11. Which of the following is an example of a natural monopoly? a. the trademark protecting Gatoraide b. the talents of Tom Hanks
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c. the local water company
d. the patent on an Intel processor Answer: c
12. Which of the following is NOT an example of a legal barrier to entry? a. patents
b. ownership of the entire supply of a resource c. copyrights d. information Answer: d
13. If Polaroid has a patent on instant cameras, this patent means that a. no other company can make cameras.
b. no other company can make an instant camera.
c. other companies can use the name Polaroid to make cameras, just not instant cameras. d. other companies can make instant cameras, but not under the name Polaroid. Answer: b
14. The U.S. Postal Service has a monopoly over first-class mail service because a. the government has granted this agency a public franchise. b. stamps are copyrighted. c. stamps are trademarked. d. stamps are patented. Answer: a
15. The makers of the movie Pearl Harbor have some monopoly power over this film be-cause the
a. movie is patented.
b. name Pearl Harbor is trademarked. c. movie is protected by copyright law.
d. government has issued the maker of this movie a public franchise. Answer: c
16. Which of the following is an example of a person or firm that has been granted a pub-lic franchise? a. medical doctor b. taxi cab driver
c. the local pizza parlor
d. the local telephone company Answer: d
Chapter8 Monopoly 经济学英语题库
