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Ch12Practice_Test_Questions

Ch12Practice_Test_Questions - 12 C h a p t e MONOPOLY r...

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12 MONOPOLY Market Power Topic: Market Power Skill: Recognition 1) Unregulated monopolies A) take the market price as given. B) cannot incorporate. C) cannot change the market quantity. D) can influence the market quantity and price. Answer: D Topic: How Monopoly Arises Skill: Recognition 2) The following are key features of a monopoly EXCEPT A) the monopoly is protected by a barrier to entry. B) no close substitutes exist for the good or ser- vice. C) the monopoly has a strong influence over the price of the good or service. D) the monopoly has severe diseconomies of scale. Answer: D Topic: How Monopoly Arises Skill: Conceptual 3) Which of the following statements about a monopoly is FALSE ? Topic: Legal Barriers To Entry Skill: Conceptual 4) Which of the following is LEAST likely to be a monopoly? Topic: Legal Barriers To Entry Skill: Recognition 5) A public franchise is Topic: Legal Barriers To Entry Skill: Conceptual 6) Public franchises create monopolies by restrict- ing A) demand. B) prices. C) entry. D) profit. Answer: C 147  C h a p t e r
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1 4 8 C H A P T E R   1 2 Topic: Legal Barriers To Entry Skill: Recognition 7) A patent grants Topic: Legal Barriers To Entry Skill: Conceptual 8) Patents create monopolies by restricting Topic: Legal Barriers To Entry Skill: Recognition 9) Patents are ____ barriers to entry and public franchises are ____ barriers to entry. Topic: Natural Monopoly Skill: Recognition
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