Microeconomics Principles And Policy 13th Edition By William J. Baumol – Test Bank

Overview

True / False Questions

1. A pure monopoly is defined as having only one seller.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

2. Monopolies are always large firms with great economies of scale.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

3. Pure monopoly is able to exist because the firm’s product is better than the substitutes that are available in the market.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

4. Pure monopoly is not studied because of its descriptive realism, but because it is a stepping stone toward more realistic models.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

5. Pure monopoly markets are very common in the real world.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

6. Under monopoly, resources are allocated as efficiently as in perfect competition.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

7. The two basic reasons why a monopoly exists are barriers to entry and cost advantages.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

8. The key element in preserving a monopoly is keeping rivals out of the market.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

9. Owning a patent can provide a firm with monopolistic power.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension

10. There exist only two causes of monopoly: barriers to entry and government restrictions.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: Monopoly
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Monopoly
TOPICS: Monopoly Defined
KEYWORDS: BLOOM’S: Comprehension