WorksheetsEconomic Systems - Monopoly
Total questions: 15
Worksheet time: 8mins
What is economic monopoly?
A board game in which players engage in simulated property and financial dealings using imitation money. It was invented in the US and the name was coined by Charles Darrow c. 1935
The exclusive possession or control of the supply of or trade in a commodity or service
Something legal
An economic system in which prices are determined by unrestricted competition between privately owned businesses
Monopoly occurs when there is a single _____ in the market of a certain good.
Household
Buyer
Producer
Consumer
Industry
Bob and Susie are sick of the bad service of Tim Hortons and hate the high prices of Starbucks. They want to start their own coffee shop - "Bob and Susie's Coffee"! What are their challenges in entering the market?
Receiving a patent
Sole ownership of necessary resources
Start-up costs are too high
They don't like coffee
The average price of mobile phones suddenly drops by $30. Which of these answers could not be true?
There was a major technological advance
The supply curve for the mobile phone industry would shift to the right
Demand for household phones would increase
Demand for mobile phones would increase
Demand for housing in Calgary suddenly rises. Which of these answers is true?
The demand curve for the housing market would shift to the left
Unemployment would increase
Housing prices would fall
The demand curve for the housing market would shift to the right
In June, Ross decides to sell ice cream from a kart on the street. First he goes to 1st street and sells his icecreams for $2 each. The next day Ross decides to go to 2nd street and he realises he can get a higher price for his product. So he charges $5 per ice cream. What is this an example of?
Rule of reason
Monopoly
Pure genius
Price discrimination
The profit maximising monopolist will always:
Try to be in debt
Produce at the lowest average total cost
Produce up to the point where the extra costs of production are more than the extra sales revenue
In Economics, what does the term Cartel refer to?
A method of plotting two variables on one graph
A popular five member American pop-rock band from Georgia
A group of firms that gets together and makes joint price and output decisions to maximise joint profits
Which of the following companies are not monopolies?
McDonalds
Simmons Pet Food
Microsoft
Which of the following are true in monopoly?
The monopolist can set price and output
The demand curve for the firm and the market are the same
The monopolist protect their position through barriers to entry
Which of the following is not true of monopolists?
Monopolists seek to maximize profits
Monopolists can raise price more than 10 percent
Monopolists can charge any price they want and make a profit
The entry of new firms is not a major concern
When you go to the movies, the theater is a monopoly vendor of popcorn while you're there (why it costs so much). Suppose that the cost to the theater of fake butter flavoring and yellow food coloring rise significantly, what will happen to the price and quantity of popcorn sold by the theater?
The price of popcorn will rise and the quantity sold will increase
The price of popcorn will rise and the quantity sold will fall
The price of popcorn will remain unchanged and the quantity sold will remain unchanged
The price of popcorn will fall and the quantity sold will fall
A member of a cartel would be most likely to increase its profits by
Insisting that the cartel continually raise the price it charges
Setting its price above that of other cartel members
Pursuing an aggressive non-price promotions policy
Cheating on cartel output restrictions by undercutting the prices of other cartel members (assuming that it did not get caught cheating)
Suppose the diamond industry is a monopoly and suppose that there is an increase in the productivity of diamond miners. Which of the following would you predict will happen in the market for diamonds in the short run?
An increase in the price of diamonds and no change in the number of diamonds sold
An increase in the price of diamonds and a decrease in the number of diamonds sold
No change in the price of diamonds and no change in the number of diamonds sold
A decrease in the price of diamonds and an increase in the number of diamonds sold
A monopoly requires
Products that are high priced
Several close substitutes for the product
A unique product with no close substitutes
That the product cannot be produced by small firms
