【国际经济学专题考试试卷十五】Monopoly

Chapter 15

Monopoly

TRUE/FALSE

1. Monopolists can achieve any level of profit they desire because they have unlimited market power.

ANS: F DIF: 2 REF: 15-0 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

2. Even with market power, monopolists cannot achieve any level of profit they desire because they will sell

lower quantities at higher prices.

ANS: T DIF: 2 REF: 15-0 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

3. One characteristic of a monopoly market is that the product is virtually identical to products produced by

competing firms.

ANS: F DIF: 2 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Definitional

4. The fundamental cause of monopolies is barriers to entry.

ANS: T DIF: 2 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

5. The De Beers Diamond company advertises heavily to promote the sale of all diamonds, not just its own. This

is evidence that it has a monopoly position to some degree.

ANS: T DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

6. The De Beers Diamond company is not worried about differentiating its product from all other gemstones. ANS: F DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

7. The amount of power that a monopoly has depends on whether there are close substitutes for its product. ANS: T DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Interpretive

8. If the ABC company owns the exclusive rights to mine land in Afghanistan for Lapis Lazuli, a rare stone used

in jewelry which is found only in Afghanistan, the company benefits from a barrier to entry.

ANS: T DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Monopoly MSC: Applicative

9. Copyrights and patents are examples of barriers to entry that afford firms monopoly pricing powers.

ANS: T DIF: 2 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Patents MSC: Interpretive

10. If the government deems a newly invented drug to be truly original, the pharmaceutical company is given the

exclusive right to manufacture and sell the drug for 50 years.

ANS: F DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Patents MSC: Interpretive

11. A natural monopoly has economies of scale for most if not all of its range of output.

ANS: T DIF: 2 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Natural monopoly MSC: Applicative

12. Declining average total cost with increased production is one of the defining characteristics of a natural

monopoly.

ANS: T DIF: 1 REF: 15-1 NAT: Analytic

LOC: Monopoly TOP: Natural monopoly MSC: Definitional

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