Question

1. (This question refers to the MRU video 'The Costs and Benefits of Monopoly'.) Why is there less consumer surplus under a monopoly than under competition?

a. Because a monopoly charges a lower price and produces more

b. Because a monopoly charges a higher price and produces less

c. Because a monopoly charges a lower price and produces less

d. Because a monopoly charges a higher price and produces more

2. (This question refers to the MRU video 'The Costs and Benefits of Monopoly'.) In comparing competition to monopoly, Professor Tabarrok uses the term "efficiency" to refer to:

a. the equilibrium level of quality.

b. maximizing the gains from trade.

c. setting the optimal price.

d. the minimization of average cost.

3. (This question refers to the MRU video 'The Monopoly Markup'.) The marginal revenue curve for a monopolist hits the:

a. vertical, or price, axis at the same point as the demand curve.

b. vertical, or price, axis at the same point as the supply curve.

c. horizontal, or quantity, axis at the same point as the supply curve.

d. horizontal, or quantity, axis at the same point as the demand curve.

4. Rational ignorance in voting comes from:

a. the expectation of individual voters that their vote will not be decisive.

b. the limited incentive of the news media to cover political campaigns.

c. externalities that lead to an excess supply of information.

d. the lack of a college education on the part of most voters in the United States.

Answer 1

1 - Option B

Because monopoly charges a higher price and produces lower output

This leads to excess demand and rise in the price . Thus decreasing the consumer surplus

2 - Option D

The minimisation of Average cost

In the perfect competition , the efficiency occurs because the price is equal to minimum of AC.

3 - Option A

Vertical or price axis at the same point as the demand curve

The demand and MR curve originate from the same point

4 - Option C

Externalities that lead to excess supply of information.