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Essentials of Economics, 4e (Hubbard/O'Brien)
Chapter 10 Monopoly and Antitrust Policy
10.1 Is Any Firm Ever Really a Monopoly?
1) The reason that the Fisherman's Friend restaurant in Stonington, Maine had a monopoly on
selling seafood dinners in that town is most likely due to
A) a government-imposed barrier.
B) occupational licensing.
C) no competitors apparently found the profit level attractive enough to enter the market.
D) the restaurant owned all the fresh seafood in the state.
Answer: C
Diff: 1 Page Ref: 309
Topic: Characteristics of Monopoly
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytic thinking
Special Feature: Chapter Opener: A Monopoly on Lobster Dinners in Maine?
2) A monopoly is a seller of a product

A) with many substitutes.
B) without a close substitute.
C) with a perfectly inelastic demand.
D) without a well-defined demand curve.
Answer: B
*: Recurring
Learning Outcome: Micro-14: Discuss production and pricing decisions within monopolies and
how public policies affect monopolies
3) If we use a narrow definition of monopoly, then a monopoly is defined as a firm

A) that has been granted special production rights by the government.
B) that can ignore the actions of all other firms because it produces a superior product compared
to its rivals' products.
C) that can ignore the actions of all other firms because it produces a product for which there are
no close substitutes.
D) that has the largest market share in an industry.
Answer: C
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1
Copyright © 2015 Pearson Education, Inc.
4) Which of following is the best example of a monopoly if we use a broader definition of
monopoly?
A) Spuds McKenzie, a wealthy potato farmer in Idaho
B) Cheap Gas, one of two gasoline stations in a large rural community
C) Santos Tacos, the only taqueria in the small town of Santosville
D) Zippie Rentals, a sports car rental service in the downtown Boston area
Answer: C
*: Recurring
5) In Walnut Creek, California, there are three very popular supermarkets: Safeway, Whole
Foods and Lunardi's. While Safeway remains open twenty-four hours a day, Whole Foods and
Lunardi's close at 9 pm. Which of the following statements is true?
A) Safeway is a monopoly all day because it produces a service that has no close substitutes.
B) Safeway has a monopoly at midnight but not during the day.
C) Safeway can ignore the pricing decisions of the other two supermarkets.
D) Safeway probably has a higher markup to compensate for its higher cost of production.
Answer: B
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6) A monopoly is characterized by all of the following except

A) there are only a few sellers each selling a unique product.
B) entry barriers are high.
C) there are no close substitutes to the firm's product.
D) the firm has market power.
Answer: A
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2
7) Peet's Coffee and Teas produces some flavorful varieties of Peet's brand coffee. Is Peet's a
monopoly?
A) Yes, there are no substitutes to Peet's coffee.
B) No, although Peet's coffee is a unique product, there are many different brands of coffee that
are very close substitutes.
C) Yes, Peet's is the only supplier of Peet's coffee in a market where there are high barriers to
entry.
D) No, Peet's is not a monopoly because there are many branches of Peet's.
Answer: B
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8) In 2011, Microsoft filed a complaint with the European Commission accusing Google of
taking steps to monopolize the Internet search engine business. Microsoft's primary complaint
was that
A) Google is the only Internet search engine available to Windows operating system users.
B) the European Union contracts exclusively with Google for its Internet search engine use.
C) Google was using its dominant position as an Internet search engine to exclude competitors.
D) Google owns the Internet advertising companies that pay for ads on search engine sites, and
has prohibited ads from being sold to competitors.
Answer: C
Diff: 2 Page Ref: 310-311
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
Special Feature: Making the Connection: Is Google a Monopoly?
9) A firm that has the ability to control to some degree the price of the product it sells
A) is also able to dictate the quantity purchased.
B) faces a demand curve that is inelastic throughout the range of market demand.
C) is a price maker.
D) faces a perfectly inelastic demand curve.
Answer: C
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3
10) A monopolist faces
A) a perfectly elastic demand curve.
B) a perfectly inelastic demand curve.
C) a horizontal demand curve.
D) a downward-sloping demand curve.
Answer: D
*: Recurring
11) Compared to a monopolistic competitor, a monopolist faces

A) a more elastic demand curve.
B) a more inelastic demand curve.
C) a more elastic demand curve at higher prices and a more inelastic demand curve at lower
prices.
D) a demand curve that has a price elasticity coefficient of zero.
Answer: B
*: Recurring
12) A monopoly differs from monopolistic competition in that

A) a monopoly has market power while a firm in monopolistic competition does not have any
market power.
B) a monopoly can never make a loss but a firm in monopolistic competition can.
C) in a monopoly there are significant entry barriers but there are low barriers to entry in a
monopolistically competitive market structure.
D) a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces
an elastic demand curve.
Answer: C
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4
13) Which of the following is a characteristic shared by a perfectly competitive firm and a
monopoly?
A) Each must lower its price to sell more output.
B) Each sets a price for its product that will maximize its revenue.
C) Each maximizes profits by producing a quantity for which marginal revenue equals marginal
cost.
D) Each maximizes profits by producing a quantity for which price equals marginal cost.
Answer: C
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14) Consider the following characteristics:

a. a market structure with barriers to entry
b. demand curves that are easily identified
c. firm cannot make zero profits in the long run
d. firm can reap long run profits.
Which of the characteristics in the list above is shared by an oligopolist and a monopolist?
A) a, b, c and d
B) a, b and d
C) a, c, and d
D) a and d
Answer: D
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15) Few firms in the United States are monopolies because

A) few firms experience economies of scale.
B) of antitrust laws.
C) when a firm earns profits, other firms will enter its market.
D) most products that firms produce have substitutes.
Answer: C
Special Feature: Chapter Opener: A Monopoly on Lobster Dinners in Maine?
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16) A monopoly is a firm that is the only seller of a good or service that does not have
A) a patent.
B) a close complement.
C) a barrier to entry.
D) a close substitute.
Answer: D
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17) A narrow definition of monopoly is that a firm is a monopoly if it can ignore

A) government antitrust laws.
B) the pricing decisions of its suppliers.
C) the pricing decisions of firms that produce complementary products.
D) the actions of all other firms.
Answer: D
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18) Using a broad definition, a firm would have a monopoly if

A) it produced a product that has no close substitutes.
B) it does not have to collude with any other producer to earn an economic profit.
C) there is no other firm selling a substitute for its product close enough that its economic profits
are competed away in the long run.
D) it can make decisions regarding price and output without violating antitrust laws.
Answer: C
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6
19) The Google search engine has a market share of ________ in the United States and
________ in Europe.
A) 90 percent; 25 percent
B) 50 percent; 50 percent
C) 70 percent; 90 percent
D) 45 percent; 15 percent
Answer: C
Learning Outcome: Micro-6: Explain the fundamentals of the elasticity of supply and demand
and the applications of both
Special Feature: Making the Connection: Is Google a Monopoly?
20) A monopoly firm is the only seller of a good or service that

A) has a perfectly elastic demand.
B) has no close complements.
C) does not need to be advertised.
D) does not have a close substitute.
Answer: D
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21) A firm that is the only seller of a good or service that does not have a close substitute is
called
A) a monopoly.
B) an oligopolist.
C) a market maker.
D) a price maker.
Answer: A
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22) A monopoly is defined as a firm that has the largest market share in an industry.
Answer: FALSE
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23) The market demand curve facing a monopolist is more elastic than the market demand curve
facing a monopolistic competitor.
Answer: FALSE
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24) Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's, a
Taco Bell and a Kentucky Fried Chicken. Using a broad definition of a monopoly, Joe has a
monopoly.
Answer: TRUE
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25) A snack shop inside a hotel in a busy city has a monopoly on food sales if it is the only food
vendor in the hotel that is open 24 hours a day.
Answer: FALSE
Special Feature: Economics in Your Life: Is There a Monopoly in Your Dorm?
8
26) A monopoly is a firm that is the only seller of a good or service that does not have a close
substitute.
Answer: TRUE
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27) Unlike a perfect competitor, a monopolist faces the market demand curve.
Answer: TRUE
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28) What is a monopoly? Can a firm be a monopoly if close substitutes for its product exists?
Answer: A monopoly is the only seller of a good or service that does not have a close substitute.
The firm can't be a monopoly is a close substitute for its product exists.
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29) If you own the only bookstore in a small town, do you have a monopoly?
Answer: Because consumers in your town could buy books on the Internet or by driving to
another town that has a bookstore store, you would not have a monopoly under the narrow
definition of the term. However, because competition from on-line sellers and stores in other
towns may not be sufficient to eliminate your economic profits in the long run, you may have a
monopoly in the broader sense of the term.
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10.2 Where Do Monopolies Come From?
1) To maintain a monopoly, a firm must have

A) a perfectly inelastic demand.
B) an insurmountable barrier to entry.
C) marginal revenue equal to demand.
D) few competitors.
Answer: B
Topic: Barriers to Entry
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2) Which one of the following about a monopoly is false?

A) A monopoly could make profits in the long run.
B) A monopoly could break even in the long run.
C) A monopoly must have some kind of government privilege or government imposed barrier to
maintain its monopoly.
D) A monopoly status could be temporary.
Answer: C
*: Recurring
3) A local electricity-generating company has a monopoly that is protected by an entry barrier

that takes the form of
A) control of a key raw material.
B) network externalities.
C) economies of scale.
D) perfectly inelastic demand curve.
Answer: C
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4) A patent or copyright is a barrier to entry based on
A) ownership of a key necessary raw material.
B) large economies of scale as output increases.
C) government action to protect a producer.
D) widespread network externalities.
Answer: C
Topic: Patents and Copyrights
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5) A public franchise
A) is a corporation that is owned by stockholders.
B) results from ownership of a key raw material.
C) is a government designation that a private firm is the only legal producer of a good or service.
D) is an unregulated monopoly necessary for the public good.
Answer: C
Topic: Public Franchise
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6) An example of a monopoly based on control of a key resource is

A) Major League Baseball.
B) the Paul Ecke Ranch monopoly on poinsettias.
C) Microsoft's Windows operating system.
D) the U.S. Food and Drug Administration.
Answer: A
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11
7) A United States government patent lasts
A) forever.
B) 50 years.
C) 20 years.
D) 7 years.
Answer: C
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8) Governments grant patents to encourage

A) research and development on new products.
B) competition.
C) low prices.
D) firms to form public enterprises.
Answer: A
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9) Governments grant patents to

A) compensate firms for research and development costs.
B) encourage competition.
C) encourage low prices.
D) encourage firms to reveal secret production techniques.
Answer: A
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12
10) For which of the following firms is patent protection of vital importance?
A) furniture producers
B) software firms
C) pharmaceutical firms
D) auto makers
Answer: C
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11) One reason patent protection is vitally important to pharmaceutical firms is

A) successful new drugs are not profitable. If firms are not granted patents many would go out of
business and health care would be severely diminished.
B) the approval process for new drugs through the Food and Drug Administration can take more
than 10 years and is very costly. Patents enable firms to recover costs incurred during this
process.
C) that taxes on profits from drugs are very high; profits from patent protection enable firms to
pay these taxes.
D) the high salaries pharmaceutical firms pay to scientists and doctors make their labor costs
higher than for any other business. Profits from patents are needed to pay these labor costs.
Answer: B
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13
12) Research has shown that most economic profits from selling a prescription drug are
eliminated 20 years after the drug is first offered for sale. The main reason for the elimination of
profits is
A) after 20 years most people who have taken the drug have passed away or are cured of the
illness the drug was intended to treat.
B) firms sell their patent rights to other firms so that they can concentrate on finding drugs to
treat new illnesses.
C) the quantity demanded of the drug has increased enough that the demand becomes inelastic
and revenue falls.
D) after 20 years patent protection is ended and other firms can produce less expensive generic
versions of the drug.
Answer: D
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13) What is the difference between a public franchise and a public enterprise?
A) A public franchise grants a firm the right to be the sole legal provider of a good or service. A
public enterprise refers to a service that is provided directly to consumers through the
government.
B) A public enterprise grants a firm the right to be the sole legal provider of a good or service. A
public franchise refers to a service that is provided directly to consumers through the
government.
C) A public enterprise is owned by the public through its holdings of shares of stock in the
enterprise. A public franchise is a firm owned by the government.
D) Both refer to a service provided directly to consumers through the government, but "public
franchise" is a term more commonly used in the United States while "public enterprise" is more
commonly used in European countries.
Answer: A
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14
14) The United States Post Office
A) faces no competition for its mail services.
B) has a monopoly in the provision of first-class mail service.
C) can safely ignore the prices for mail services charges by its rivals such as FedEx and UPS.
D) is an example of a monopoly that results from the ownership of a key resource: first class
mail service.
Answer: B
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15) The Aluminum Company of America (Alcoa) had a monopoly until the 1940s because
A) it was a public enterprise.
B) it had a patent on the manufacture of aluminum.
C) the company had a secret technique for making aluminum from bauxite.
D) it had control of almost all the available supply of bauxite.
Answer: D
*: Recurring
16) In 1935, the U.S. Patent and Trademark Office issued Parker Brothers a trademark on the
use of the name Monopoly for a board game. Hasbro bought Parker Brothers in 1991. Which of
the following statements is true regarding the trademark on the name Monopoly for a board
game?
A) The original trademark expired well before Hasbro bought Parker Brothers, so they never had
a trademark on Monopoly.
B) Trademarks never expire, so Hasbro continues to have a trademark on the name Monopoly.
C) The trademark expired in 2011, 20 years after Hasbro's purchase of Parker Brothers.
D) The trademark expired in 1955, 20 years after the trademark was issued to Parker Brothers.
Answer: B
Special Feature: Making the Connection: Does Hasbro Have a Monopoly on Monopoly?
15
17) The De Beers Company, one of the longest-lived monopolies, is facing increasing
competition. One source of competition comes from people who might resell their previously
owned diamonds. Why is De Beers worried that people might resell their previously owned
diamonds?
A) because De Beers will not be able to guarantee the quality of previously owned diamonds and
fears that its reputation might be harmed
B) because the availability of previously owned diamonds would increase the market demand for
diamonds and dilute De Beers' monopoly
C) because previously owned diamonds would be a close substitute to newly mined diamonds
and therefore reduce De Beers' market power
D) because the availability of previously owned diamonds would make the market demand curve
for diamonds more inelastic and force De Beers to lower its price
Answer: C
Special Feature: Making the Connection: Are Diamond Profits Forever? The De Beers Diamond
Monopoly
18) What is a network externality?

A) It refers to having a network of suppliers and buyers for a good or service.
B) It refers to lobbying to form a public enterprise.
C) It refers to a situation in which a product's usefulness increases with the number of people
using it.
D) It refers to a product that requires connection to a network for it to be useful.
Answer: C
Topic: Network Externalities
*: Recurring
16
19) A virtuous cycle occurs
A) when lobbyists petition members of Congress to grant a public franchise; the lobbyist then
raise money for those Congress members who granted the franchise.
B) when monopoly profits are used to create new products for additional monopoly profits.
C) when a firm can attract enough buyers initially to increase a product's usefulness to attract
even more buyers.
D) when a firm's sales volume reaches a level where the firm can take advantage of economies of
scale; thereby reducing the price of the product to further boost its sales.
Answer: C
*: Recurring
20) For a natural monopoly to exist

A) a firm must continually buy up its rivals.
B) a firm's long-run average cost curve must exhibit diseconomies of scale beyond the
economically efficient output level.
C) a firm's long-run average cost curve must exhibit economies of scale throughout the relevant
range of market demand.
D) a firm must have a government-imposed barrier.
Answer: C
Topic: Natural Monopoly
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21) In a natural monopoly, throughout the range of market demand

A) marginal cost is above average total cost and pulls average total cost upward.
B) average total cost is above marginal cost and pulls marginal cost upward.
C) marginal cost is below average total cost and pulls average total cost downward.
D) there are diseconomies of scale.
Answer: C
*: Recurring
17
22) To have a monopoly in an industry there must be
A) barriers to entry so high that no other firms can enter the industry.
B) a patent or copyright giving the firm exclusive rights to sell a product for 20 years.
C) an inelastic demand for the industry's product.
D) a public franchise, making the monopoly the exclusive legal provider of a good or service.
Answer: A
*: Recurring
23) Which one of the following is not a possible barrier to entry high enough to keep competing
firms out of a monopoly industry?
A) The monopoly firm has control of a key resource necessary to produce a good.
B) There are important network externalities in supplying a good or service.
C) large economies of scale that result in a natural monopoly
D) a high concentration ratio
Answer: D
*: Recurring
24) When the government wants to give an exclusive right to one firm to produce a product, it
A) imposes a tariff on imports of the product.
B) imposes a quota on imports of the product.
C) grants a patent or copyright to an individual or firm.
D) uses antitrust laws to keep other firms from entering the market.
Answer: C
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18
25) There are several types of barriers to entry that can create a monopoly. Which of the
following barriers is the result of government action?
A) network externalities
B) public franchise
C) economies of scale
D) control of a key resource
Answer: B
*: Recurring
26) When the government makes a firm the exclusive legal provider of a good or service, it
grants the firm
A) a copyright.
B) a network externality.
C) a quota.
D) a public franchise.
Answer: D
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27) A patent
A) grants the creator of a book, film, or piece of music the exclusive right to use the creation for
20 years.
B) grants the creator of a book, film, or piece of music the exclusive right to use the creation
during the creator's lifetime.
C) gives a firm the exclusive right to a new product for 20 years from the date the product is
invented.
D) gives the firm the exclusive right to a new product during the product inventor's lifetime.
Answer: C
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19
28) Ordinarily, governments attempt to promote competition in markets. Why do governments
use patents to block entry into some markets when this prohibits competition?
A) Patents encourage firms to spend money on research necessary to create new products.
B) Politicians sometimes succumb to pressure from lobbyists to grant favors to businesses for
political reasons.
C) Patents are an important source of government revenue.
D) Patents are justified because they are an important means for creating network externalities.
Answer: A
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29) Experience with patents in the pharmaceutical industry shows that when patents on drugs
expire
A) most patients will continue to buy the drugs from the same firms because their doctors
recommend they buy brand-name drugs.
B) prices remain high without patent protection because of a lack of competition. Firms that are
not granted patents cannot compete with firms that are granted patents.
C) other firms are free to produce chemically identical drugs. Competition reduces the profits
that had been earned by the firms that received patents.
D) firms will find ways to obtain additional patent protection - often by making cosmetic
changes in drugs that were patented - so that they can continue charging high prices.
Answer: C
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30) Many biologic drug manufacturers are pushing for patent protection to be extended to 12
years before generics are allowed to be introduced to the market. This reflects which of the
following barriers to entry?
A) control of a key resource
B) network externalities
C) entry blocked by government action
D) economies of scale creating a natural monopoly
Answer: C
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20
31) The 10-year protection period from generic competition for drug manufacturers is a form of
A) copyright.
B) trademark.
C) hallmark.
D) patent.
Answer: D
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32) Network externalities

A) can only exist when there are economies of scale.
B) prevent the dominance of a market by one firm.
C) exist when the usefulness of a product increases with the number of consumers who use it.
D) are created when celebrity endorsements of products lead to a surge in the demand for those
products.
Answer: C
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33) What type of protection does U.S. law grant the creator of a book, film or piece of music?
A) A public franchise, which grants the exclusive right to use the creation during the author's
lifetime and to his or her heirs for 70 years after the author's death.
B) A copyright, which grants exclusive rights to the creation's author for 20 years after the work
is created.
C) A patent, which grants the exclusive right to use the creation during the author's lifetime and
to his or her heirs for 70 years after the author's death.
D) A copyright, which grants the exclusive right to use the creation during the author's lifetime
and to his or her heirs for 70 years after the author's death.
Answer: D
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21
34) The International Nickel Company of Canada is often cited as an example of monopoly.
What was the source of the barrier to entry that gave this firm monopoly power?
A) It was a public enterprise; therefore, the Canadian government blocked entry into the market
for nickel.
B) There were important network externalities in the production of nickel.
C) Economies of scale resulted in the company becoming a natural monopoly.
D) control of a key resource
Answer: D
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35) The International Nickel Company of Canada is often cited as an example of monopoly, but
International Nickel eventually lost its monopoly. What event was responsible for this?
A) New technology allowed other firms to achieve network externalities after World War II.
B) The Canadian government, which had owned International Nickel, sold the company after
World War II. The government no longer blocked entry into the market for nickel.
C) Competition in the market for nickel increased after nickel fields were developed in Russia
after World War II.
D) Competition in the market for nickel increased after Canada signed the North American Free
Trade Agreement with the United States and Mexico in 1994.
Answer: C
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36) In the United States, barriers to entry in professional team sports (for example, football and
baseball) result from
A) the draft of college players, which grants teams exclusive signing rights to individual players.
B) long-term leases teams sign for stadiums and ballparks in major cities.
C) television contracts, which give networks the exclusive rights to broadcast games.
D) the reserve clause, which is a provision in contracts of professional athletes that require them
to play for specific teams over the length of their contracts.
Answer: B
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22
37) The De Beers diamond mining and marketing company of South Africa became one of the
most profitable and longest-lived monopolies in history. Which of the following has always
threatened De Beers' control of the diamond market?
A) Since few diamonds are ever destroyed, De Beers has constantly faced possible competition
from other firms reselling diamonds.
B) Competition from imitation diamonds. Technology has made it possible to make fake
diamonds look exactly like real diamonds.
C) Competition from other gemstones, including rubies and emeralds, that have become more
popular over time.
D) At different times in the past some countries have banned the importation of diamonds from
South Africa for political reasons.
Answer: A
Monopoly
38) BHP Billiton is a Canadian company that owns mines in Canada that
A) produce nickel. After World War II, BHP Billiton began to compete with another Canadian
firm, the International Nickel Company. This competition eventually ended International
Nickel's monopoly in this market.
B) produces bauxite, the mineral needed to produce aluminum. BHP Billiton began to mine
bauxite after World War II. This competition eventually ended the Aluminum Company of
America (ALCOA)'s monopoly in this market.
C) produces coal. Until World War II, BHP Billiton had a monopoly on coal in Canada.
D) produce diamonds.
Answer: D
Monopoly
23
39) After having a monopoly in the diamond market for many years, by 2000 the De Beers
company faced competition from other companies. To maintain its market share, De Beers
A) began buying so-called "blood diamonds" in order to keep these diamonds out of the control
of other diamond companies.
B) adopted a strategy of differentiating its diamonds. Each of its diamonds is now marked with a
microscopic brand.
C) bought diamond mines in Canada and Russia that had been its competitors.
D) lowered the prices of its diamonds to make the market appear less profitable to potential
competitors.
Answer: B
Monopoly
40) Some economists argue that Microsoft become a monopoly in the market for computer
software by developing MS-DOS, an operating system used for the first IBM personal
computers. The more people who used MS-DOS-based programs, the greater the usefulness of a
using a computer with an MS-DOS operating system. The explanation for Microsoft's monopoly
is
A) the development of new technology that other firms could not copy.
B) control of a key resource which, in this case, is the MS-DOS operating system.
C) network externalities.
D) patents Microsoft obtained when it developed the MS-DOS operating system.
Answer: C
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41) Although some economists believe network externalities are important barriers to entry,
other economists disagree because
A) they believe that the dominant positions of firms that are supposedly due to network
externalities are to a greater extent the result of the efficiency of firms in offering products that
satisfy consumer preferences.
B) they believe that most examples of network externalities are really barriers to entry caused by
the control of a key resource.
C) network externalities are really negative externalities.
D) they believe that the dominant positions of firms that are supposedly due to network
externalities are to a greater extent the result of economies of scale.
Answer: A
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42) In discussions of barriers to entry, what is meant by the term "virtuous cycle"?
A) A virtuous cycle refers to successful research and development that leads to information that
is used to develop other new products.
B) A virtuous cycle refers to a firm using the profits from a monopoly in one market to establish
a monopoly in another market.
C) A virtuous cycle refers to the situation where the pursuit of self-interest in establishing an
entry barrier leads to an increase in social welfare (the "invisible hand").
D) A virtuous cycle refers to a situation where if a firm can attract enough customers initially, it
can attract additional customers because its product's value has been increased by other
customers using it, which attracts even more customers.
Answer: D
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43) To be a natural monopoly a firm must
A) control a key resource input.
B) have economies of scale that are so large that it can supply the entire market at a lower cost
than two or more firms.
C) have significant network externalities.
D) be very large relative to the total market.
Answer: B
*: Recurring
Figure 10-1
44) Refer to Figure 10-1. Which of the following statements about the firm depicted in the
diagram is true?
A) The fact that this firm is a natural monopoly is shown by the continually declining long-run
average total cost as output rises.
B) The fact that this firm is a natural monopoly is shown by the continually declining market
demand curve as output rises.
C) The fact that this firm is a natural monopoly is shown by the continually declining marginal
revenue curve as output rises.
D) The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below
the long-run average total cost where the firm maximizes its profits.
Answer: A
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26
45) A natural monopoly is most likely to occur in which of the following industries?
A) the pharmaceutical industry because the development and approval of new drugs through the
Food and Drug Administration can take more than 10 years
B) the diamond mining and marketing industry because one firm can control a key resource
C) the software industry because of the importance of network externalities
D) an industry where fixed costs are very large relative to variable costs
Answer: D
*: Recurring
46) If a restaurant was a natural monopoly, its

A) marginal cost curve would still be declining when it crossed the demand curve.
B) average total cost curve would still be declining when it crossed the demand curve.
C) marginal revenue curve wold be the same as its demand curve.
D) marginal revenue curve would be horizontal.
Answer: B
Special Feature: Solved Problem: Can a Restaurant Be a Natural Monopoly?
47) If a restaurant was a natural monopoly, dividing the restaurant equally into two separate
restaurants would
A) decrease marginal cost.
B) raise average total cost.
C) increase total revenue.
D) make marginal revenue less elastic.
Answer: B
Special Feature: Solved Problem: Can a Restaurant Be a Natural Monopoly?
27
48) A natural monopoly is characterized by large fixed costs relative to variable costs.
Answer: TRUE
*: Recurring
49) For a natural monopoly, the marginal cost of producing an additional unit of its product is
relatively small.
Answer: TRUE
*: Recurring
50) The National Football League has long-term leases with the stadiums in major cities. Control
of these stadiums is an entry barrier to a potential new football league.
Answer: TRUE
*: Recurring
51) Most pharmaceutical firms selling prescription drugs continue to earn economic profits long
after the patents on the prescription drugs expire because they have established a strong foothold
in the market.
Answer: FALSE
*: Recurring
28
52) Network externalities refer to the situation where the usefulness of a product increases with
the number of consumers who use it.
Answer: TRUE
*: Recurring
53) A public franchise gives the exclusive right to produce a product for 20 years from the date
the product is invented.
Answer: FALSE
*: Recurring
54) A virtuous cycle refers to the development of new products that follows when a monopoly
earns economic profits.
Answer: FALSE
*: Recurring
55) Provide two examples of a government barrier to entry?

Answer:
1. A patent or copyright which gives an individual or a firm the exclusive right to produce a
product for a given period of time, for example, a patents for pharmaceutical drugs such as the
anti-depressant, Prozac, manufactured by Eli Lilly.
2. A public franchise which makes it the exclusive legal producer of a good or service, for
example, PG&E is the sole provider of gas and electric utilities in northern California.
*: Recurring
29
56) How does a network externality serve as a barrier to entry? Is this barrier surmountable?
Explain.
Answer: A network externality exists where the usefulness of the product increases with the
number of people who use it. It can serve as an entry barrier because the popularity of the
product attracts more and more consumers, thereby increasing the supplier's dominance in the
market. However, this barrier is not insurmountable. If a rival enters the market with a superior
product, then it is possible that customers will switch to the superior product.
*: Recurring
57) What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
Answer: A natural monopoly arises when the production function exhibits economies of scale
over the relevant range of market demand. The average cost of production is lower as the output
produced increases. Consumers benefit from having one supplier because the supplier will be
able to pass some of the cost savings to consumers.
*: Recurring
58) What is a public franchise? Are all public franchises natural monopolies?
Answer: A public franchise is a firm which the government designates as the only legal provider
of a good or service. It is doubtful that most public franchises are natural monopolies. If they
were, they wouldn't need the government to restrict their competitors.
*: Recurring
30
59) U.S. antitrust laws are designed to prohibit monopolization and encourage competition. Why,
then, does the government erect barriers to entry and create monopoly power by granting firms
patents?
Answer: Patents are designed to encourage creative activity and promote the development of
new technologies. Firms can spend years on research and development in the search for new and
better production processes and consumer products. Research and development is costly - many
potential new ideas are ultimately not technically feasible or never become commercially
successful. If research and development results in a successful product, competing firms can
easily copy the product and sell it without incurring the research costs of the firm that developed
the product, if patent protection is not granted. Most people would object to this form of "free
riding" on equity grounds; but patents also encourage firms to conduct research that leads to
social benefits: new technologies result in a higher standard of living for all and a more efficient
allocation of society's scarce resources.
*: Recurring
60) Identify four reasons for high entry barriers? Briefly explain each reason.
Answer:
1. Economies of scale. This occurs when a firm faces declining average total cost over the
entire range of output that consumers are willing to buy. When this happens, the larger the firm's
output, the smaller its per-unit costs, making it difficult for small firms to enter the market since
the small firms face much higher average costs. Thus, only a single firm will survive.
2. Government can block entry via legal barriers such as public franchise, government license,
patent, or copyright. A public franchise is a firm the government designates will be the only legal
provider of a good or service. A government license controls entry into particular occupations,
professions, and industries. Patents and copyrights grant exclusive rights to a product that is
invented or created.
3. Control over a key resource. If one firm owns the entire (or a great percentage of the)
resource needed to produce a final good, it creates a barrier to entry because it limits other
producers' access to that resource.
4. Network externalities in supplying the good or service. If a product becomes more valuable
when more people use it, then firms with larger outputs (networks) may have advantages over
smaller firms.
*: Recurring
31
10.3 How Does a Monopoly Choose Price and Output?
1) The demand curve for the monopoly's product is

A) the market demand for the product.
B) more elastic than the market demand for the product.
C) more inelastic than the market demand for the product.
D) undefined.
Answer: A
Topic: Demand and Marginal Revenue
*: Recurring
2) A monopolist's profit maximizing price and output correspond to the point on a graph
A) where average total cost is minimized.
B) where total costs are the smallest relative to price.
C) where marginal revenue equals marginal cost and charging the price on the market demand
curve for that output.
D) where price is as high as possible.
Answer: C
*: Recurring
3) Microsoft hires marketing and sales specialists to decide what prices it should set for its
products, whereas a wealthy corn farmer in Iowa, who sells his output in the world commodity
market, does not. Why is this so?
A) because Microsoft is large enough to hire the best people in the field
B) because Microsoft could potentially lose sales if it sets prices indiscriminately
C) because the wealthy corn farmer is a price taker who chooses his optimal output
independently of market price but Microsoft's optimal output depends on the price it selects
D) because unlike Microsoft, the wealthy corn farmer is probably a monopolist
Answer: B
Topic: Comparing Monopoly and Perfect Competition
*: Recurring
32
4) Because a monopoly's demand curve is the same as the market demand curve for its product
A) the monopoly's marginal revenue equals its price.
B) the monopoly is a price taker.
C) the monopoly must lower its price to sell more of its product.
D) the monopoly's average total cost always falls as it increases its output.
Answer: C
*: Recurring
5) If a theatre company expects $250,000 in ticket revenue from five performances and $288,000
in ticket revenue if it adds a sixth performance, the
A) marginal revenue of the sixth performance is $48,000.
B) marginal revenue of the sixth performance is $38,000.
C) cost of staging the sixth performance is probably higher than the cost of staging the previous
five.
D) company will be making a loss on the sixth performance because its ticket sales will be less
than the average received from the previous five.
Answer: B
*: Recurring
Learning Outcome: Micro-20: Apply the concepts of opportunity cost, marginal analysis, and
present value to make decisions
6) If a monopolist's price is $50 per unit and its marginal cost is $25, then
A) to maximize profit the firm should increase output.
B) to maximize profit the firm should decrease output.
C) to maximize profit the firm should continue to produce the output it is producing.
D) Not enough information is given to say what the firm should do to maximize profit.
Answer: D
Topic: Profit Maximization
*: Recurring
33
7) If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then
A) to maximize profit the firm should increase output.
B) to maximize profit the firm should decrease output.
C) to maximize profit the firm should continue to produce the output it is producing.
D) Not enough information is given to say what the firm should do to maximize profit.
Answer: C
*: Recurring
Figure 10-2
Figure 10-2 above shows the demand and cost curves facing a monopolist.
8) Refer to Figure 10-2. To maximize profit, the firm will produce

A) Q1.
B) Q2.
C) Q3.
D) Q4.
Answer: B
*: Recurring
34
9) Refer to Figure 10-2. The firm's profit-maximizing price is
A) P1.
B) P2.
C) P3.
D) P4.
Answer: C
*: Recurring
10) Refer to Figure 10-2. If the firm's average total cost curve is ATC1, the firm will
A) suffer a loss.
B) break even.
C) make a profit.
D) face competition.
Answer: C
*: Recurring
A) suffer a loss.
B) break even.
C) make a profit.
Answer: B
*: Recurring
35
A) suffer a loss.
B) break even.
C) make a profit.
Answer: A
*: Recurring
13) If a firm's average total cost is less than price where MR=MC
A) the firm should shut down.
B) the firm should raise its price.
C) the firm should continue to produce the output it is producing.
D) the firm should cut back on its output to lower its cost.
Answer: C
*: Recurring
36
Table 10-1
Quantity Total Cost of
Price per Unit
Demanded Production
(units) (dollars)
$85 10 $530
80 11 540
75 12 550
70 13 560
65 14 575
60 15 595
55 16 625
A monopoly producer of foreign language translation software faces a demand and cost structure
as given in Table 10-1.
14) Refer to Table 10-1. What is the marginal revenue from the sale of the 12th unit?
A) $75
B) $50
C) $20
D) -$5
Answer: C
Special Feature: Solved Problem: Finding the Profit-Maximizing Price and Output for a
Monopolist
15) Refer to Table 10-1. What is the firm's profit-maximizing output and what is the price
charged to sell this output?
A) P = $85; Q = 10
B) P = $80; Q = 11
C) P = $70; Q = 13
D) P = $65; Q = 14
Answer: C
Monopolist
37
16) Refer to Table 10-1. What is the amount of the firm's profit?
A) $335
B) $350
C) $880
D) $910
Answer: B
Monopolist
17) Which of the following statements applies to a monopolist but not to a perfectly competitive
firm at their profit maximizing outputs?
A) Marginal revenue is less than price.
B) Marginal revenue equals marginal cost.
C) Price equals marginal cost.
D) Average revenue equals average cost.
Answer: A
Topic: Comparing Monopoly and Perfect Competition
*: Recurring
18) Long-run economic profits would most likely exist in which market structure?
A) monopoly, monopolistic competition and oligopoly
B) monopoly and oligopoly
C) monopoly and monopolistic competition
D) monopoly only
Answer: B
*: Recurring
38
Figure 10-3
Figure 10-3 above shows the demand and cost curves facing a monopolist.
19) Refer to Figure 10-3. Suppose the monopolist represented in the diagram above produces
positive output. What is the profit-maximizing/loss-minimizing output level?
A) 630 units
B) 800 units
C) 850 units
D) 880 units
Answer: A
*: Recurring
positive output. What is the price charged at the profit-maximizing/loss-minimizing output level?
A) $38
B) $54
C) $68
D) $75
Answer: C
*: Recurring
39
positive output. What is the profit/loss per unit?
A) loss of $7 per unit
B) profit of $30 per unit
C) loss of $21 per unit
D) profit of $14 per unit
Answer: A
*: Recurring
22) Refer to Figure 10-3. What happens to the monopolist represented in the diagram in the long
run?
A) It will raise its price at least until it breaks even.
B) If the cost and demand curves remain the same, it will exit the market.
C) The government will subsidize the monopoly to enable it to break even.
D) It will be forced out of business by more efficient producers.
Answer: B
*: Recurring
40
Figure 10-4
Figure 10-4 shows the demand and cost curves for a monopolist.
23) Refer to Figure 10-4. What is the profit-maximizing/loss-minimizing output level?

A) 600 units
B) 800 units
C) 940 units
D) 1,160 units
Answer: A
*: Recurring
24) Refer to Figure 10-4. What is the price charged for the profit-maximizing output level?
A) $13
B) $21
C) $27
D) $34
Answer: D
*: Recurring
41
25) Refer to Figure 10-4. What is the amount of the monopoly's total revenue?
A) $21,600
B) $20,400
C) $19,740
D) $7,800
Answer: B
*: Recurring
26) Refer to Figure 10-4. What is the amount of the monopoly's total cost of production?
A) $21,600
B) $17,700
C) $9,340
D) $7,800
Answer: B
*: Recurring
27) Refer to Figure 10-4. What is the amount of the monopoly's profit?
A) $2,700
B) $4,200
C) $10,400
D) $12,600
Answer: A
*: Recurring
42
28) Refer to Figure 10-4. What is likely to happen to this monopoly in the long run?
A) New firms will enter the market to eliminate its profits.
B) It will expand its output to take advantage of economies of scale so as to further increase its
profit.
C) As long as there are entry barriers, this firm will continue to enjoy economic profits.
D) It will be regulated by the government because of its excess profits.
Answer: C
*: Recurring
29) A monopoly firm's demand curve

A) is the same as the market demand curve.
B) is perfectly inelastic.
C) is more inelastic than the demand curve for the product.
D) is inelastic at high prices and elastic at lower prices.
Answer: A
*: Recurring
30) Which of the following is true for a monopolist?

A) Being the only seller in the market, the monopolist faces a perfectly inelastic demand curve.
B) Being the only seller in the market, the monopolist faces a perfectly elastic demand curve.
C) Being the only seller in the market, the monopolist faces the market demand curve.
D) Being the only seller in the market, the monopolist faces a downward sloping demand curve
that lies below the marginal revenue curve.
Answer: C
*: Recurring
43
31) A price maker is
A) a person who actively seeks out the best price for a product that he or she wishes to buy.
B) a firm that has some control over the price of the product it sells.
C) a firm that is able to sell any quantity at the highest possible price.
D) a consumer who participates in an auction where she announces her willingness to pay for a
product.
Answer: B
*: Recurring
32) Firms that face downward-sloping demand curves for their output in the product market are
called
A) price takers.
B) price dictators.
C) monopolists.
D) price makers.
Answer: D
*: Recurring
33) Wendell can sell five motor homes per week at a price of $22,000. If he lowers the price of
motor homes to $20,000 per week he will sell six motor homes. What is the marginal revenue of
the sixth motor home?
A) $10,000
B) $12,000
C) $20,000
D) $22,000
Answer: A
*: Recurring
44
Figure 10-5
34) Refer to Figure 10-5. If the monopolist charges price P* for output Q*, in order to maximize
profit or minimize loss in the short run, it should
A) continue to produce because price is greater than average variable cost.
B) shut down because price is greater than marginal cost.
C) shut down because price is less than average total cost.
D) continue to produce because a monopolist always earns a profit.
Answer: A
*: Recurring
45
Another random document with
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A beautiful thread, than a thread of sin.
THE FORTUNATE ISLES

By Joaquin Miller
You sail and you seek for the Fortunate Isles,

The old Greek Isles of the yellow bird’s song?
Then steer straight on through the watery miles,
Straight on, straight on and you can’t go wrong.
Nay not to the left, nay not to the right,
But on, straight on, and the Isles are in sight,
The Fortunate Isles where the yellow birds sing
And life lies girt with a golden ring.
These Fortunate Isles they are not so far,

They lie within reach of the lowliest door;
You can see them gleam by the twilight star;
You can hear them sing by the moon’s white shore—
Nay, never look back! Those leveled grave stones
They were landing steps; they were steps unto thrones
Of glory for souls that have sailed before,
And have set white feet on the fortunate shore.
And what are the names of the Fortunate Isles?

Why, Duty and Love and a large Content.
Lo! these are the Isles of the watery miles,
That God let down from the firmament.
Lo! Duty, and Love, and a true man’s Trust;
Your forehead to God though your feet in the dust;
Lo! Duty, and Love, and a sweet Babe’s Smiles,
And these, O friend, are the Fortunate Isles.
—Copyright by Harr Wagner Co., San Francisco, and used by kind

permission of author and publisher.
YOSEMITE
By Joaquin Miller
Sound! sound! sound!

O colossal walls and crown’d
In one eternal thunder!
Sound! sound! sound!
O ye oceans overhead,
While we walk, subdued in wonder,
In the ferns and grasses, under
And beside the swift Merced!
Fret! fret! fret!

Streaming, sounding banners, set
On the giant granite castles
In the clouds and in the snow!
But the foe he comes not yet,—
We are loyal, valiant vassals,
And we touch the trailing tassels
Of the banners far below.
Surge! surge! surge!

From the white Sierra’s verge,
To the very valley blossom.
Surge! surge! surge!
Yet the song-bird builds a home,
And the mossy branches cross them,
And the tasseled tree-tops toss them,
In the clouds of falling foam.
Sweep! sweep! sweep!

O ye heaven-born and deep,
In one dread, unbroken chorus!
We may wonder or may weep,—
We may wait on God before us;
We may shout or lift a hand,—
We may bow down and deplore us,
But may never understand.
Beat! beat! beat!
We advance, but would retreat
From this restless, broken breast
Of the earth in a convulsion.
We would rest, but dare not rest,
For the angel of expulsion
From this Paradise below
Waves us onward and ... we go.

THE DEAD MILLIONAIRE

By Joaquin Miller
The gold that with the sunlight lies

In bursting heaps at dawn,
The silver spilling from the skies
At night to walk upon,
The diamonds gleaming in the dew
He never saw, he never knew.
He got some gold, dug from the mud,

Some silver, crushed from stones.
The gold was red with dead man’s blood,
The silver black with groans;
And when he died he moaned aloud,
“There’ll be no pocket in my shroud.”

PETER COOPER
(Died 1883)
By Joaquin Miller
Give honor and love forevermore
To this great man gone to rest;
Peace on the dim Plutonian shore,
Rest in the land of the blest.
I reckon him greater than any man

That ever drew sword in war;
I reckon him nobler than king or khan,
Braver and better by far.
And wisest he in this whole wide land

Of hoarding till bent and gray;
For all you can hold in your cold dead hand
Is what you have given away.
So whether to wander the stars or to rest

Forever hushed and dumb,
He gave with a zest and he gave his best—
Give him the best to come.

THE VOICE OF THE DOVE

By Joaquin Miller
Come, listen, O Love, to the voice of the dove,

Come, hearken and hear him say:
“There are many To-morrows, my Love, my Love,
There is only one To-day.”
And all day long you can hear him say

This day in purple is rolled
And the baby stars of the milky-way
They are cradled in cradles of gold.
Now what is thy secret serene, gray dove,

Of singing so sweetly alway?
“There are many To-morrows, my Love, my Love,
There is only one To-day.”

WHERE THE WEST BEGINS

By Arthur Chapman
Out where the handclasp’s a little stronger,

Out where a smile dwells a little longer,
That’s where the West begins.
Out where the sun’s a little brighter,
Where the snow that falls is a trifle whiter,
Where the bonds of home are a wee bit tighter,
Out where the skies are a trifle bluer,

Out where friendship’s a little truer,
Out where a fresher breeze is blowing,
Where there is laughter in each streamlet flowing,
Where there’s more of reaping and less of sowing,
Out where the world is in the making,

Where fewer hearts with despair are aching,
Where there is more of singing and less of sighing,
Where there is more of giving and less of buying,
And a man makes friends without half trying—
AS I CAME DOWN FROM LEBANON

By Clinton Scollard
As I came down from Lebanon,

Came winding, wandering slowly down
Through mountain passes bleak and brown,
The cloudless day was well nigh done.
The city like an opal set
In emerald, showed each minaret
Afire with radiant beams of sun,
And glistened orange, fig, and lime,
Where song-birds made melodious chime,
As I came down from Lebanon.

Like lava in the dying glow,
Through olive orchards far below
I saw the murmuring river run;
And ’neath the wall upon the sand
Swart sheiks from distant Samarcand,
With precious spices they had won,
Lay long and languidly in wait
Till they might pass the guarded gate,

I saw strange men from lands afar,
In mosque and square and gay bazar,
The magi that the Moslem shun,
And grave effendi from Stamboul,
Who sherbet sipped in corners cool;
And, from the balconies o’errun
With roses, gleamed the eyes of those
Who dwell in still seraglios,

The flaming flower of daytime died,
And Night, arrayed as is a bride
Of some great king, in garment spun
Of purple and the finest gold,
Outbloomed in glories manifold,
Until the moon, above the dun
And darkening desert, void of shade,
Shone like a keen Damascus blade,
APPLE BLOSSOMS
By William Wesley Martin
Have you seen an apple orchard in the spring? in the spring?

An English apple orchard in the spring?
When the spreading trees are hoary
With their wealth of promised glory,
And the mavis pipes his story
In the spring?
Have you plucked the apple blossoms in the spring? in the spring?
And caught their subtle odors in the spring?
Pink buds bursting at the light,
Crumpled petals baby-white,
Just to touch them a delight!
In the spring!
Have you walked beneath the blossoms in the spring? in the spring?
Beneath the apple blossoms in the spring?
When the pink cascades were falling,
And the silver brooklets brawling,
And the cuckoo-bird is calling
In the spring?
Have you seen a merry bridal in the spring? in the spring?

In an English apple country in the spring?
When the brides and maidens wear
Apple blossoms in their hair:
Apple blossoms everywhere,
In the spring!
If you have not, then you know not, in the spring, in the spring,
Half the color, beauty, wonder of the spring.
No sight can I remember,
Half so precious, half so tender,
As the apple blossoms render
In the spring!
A MATCH
By A. C. Swinburne
If love were what the rose is,

And I were like the leaf,
Our lives would grow together
In sad or singing weather,
Blown fields or flowerful closes,
Green pastures or gray grief;
If love were what the rose is,
And I were like the leaf.
If you were queen of Pleasure,

And I were king of Pain,
We’d hunt down Love together,
Pluck out his flying-feather,
And teach his feet a measure,
And find his mouth a rein;
If you were queen of Pleasure;
And I were king of Pain.
THE BROOK AND THE WAVE

By Henry Wadsworth Longfellow
The brooklet came from the mountain,

As sang the bard of old,
Running with feet of silver
Over the sands of gold!
Far away in the briny ocean

There rolled a turbulent wave
Now singing along the sea-beach,
Now howling along the cave.
And the brooklet has found the billow

Though they flowed so far apart,
And has filled with its freshness and sweetness
That turbulent bitter heart!
INDIRECTION
By Richard Realf
Fair are the flowers and the children, but their subtle suggestion is
fairer;
Rare is the roseburst of dawn, but the secret that clasps it is rarer;
Sweet the exultance of song, but the strain that precedes it is
sweeter;
And never was poem yet writ, but the meaning out-mastered the
meter.
Never a daisy that grows, but a mystery guideth the growing;

Never a river that flows, but a majesty scepters the flowing;
Never a Shakespeare that soared, but a stronger than he did enfold
him,
Nor ever a prophet foretells, but a mightier seer hath foretold him.
Back of the canvas that throbs the painter is hinted and hidden;
Into the statue that breathes the soul of the sculptor is bidden;
Under the joy that is felt lie the infinite issues of feeling;
Crowning the glory revealed is the glory that crowns the revealing.
Great are the symbols of being, but that which is symboled is
greater;
Vast the create and beheld, but vaster the inward creator;
Back of the sound broods the silence, back of the gift stands the
giving;
Back of the hand that receives thrill the sensitive nerves of receiving.
Space is as nothing to spirit, the deed is outdone by the doing;

The heart of the wooer is warm, but warmer the heart of the wooing;
And up from the pits where these shiver, and up from the heights
where those shine,
Twin voices and shadows swim starward, and the essence of life is
divine.
—Copyright by Funk & Wagnalls Co., New York, and used by kind
permission.
LIFE AND LOVE

By Richard Realf
There is something to live for and something to love

Wherever we linger, wherever we rove,
There are thousands of sad ones to cheer and sustain
Till hopes that were hidden beam o’er them again.
There is something to live for and something to love,

For the spirit of Man is like garden or grove,
It will yield a sweet fragrance, but still you must toil,
And cherish the blossoms, and culture the soil.
There is something to live for and something to love,

’Tis a truth which the misanthrope ne’er can disprove,
For tho’ thorns and thistles may choke up the flower,
Some beauty will grace the most desolate bower.
Then think on, brother, wherever thou art,

Let the life be for men and the love for the heart,
For know that the pathway which leads us above
Is something to live for and something to love.
permission.
SONG OF SPRING
By Richard Realf
My heart goes forth to meet the Spring

With the step of a bounding roe,
For it seems like the touch of a seraph’s wing
When the pleasant south winds blow.
O, I love the loveliness that lies

In the smiling heart of May,
The beauty throbbing in violet eyes,
The breath of the fragrant hay.
There’s a great calm joy in the song of birds,

And in the voice of the streams,
In the lowly peace of flocks and herds,
And our own soul’s quiet dreams.
So my heart goes forth to meet the Spring

As a lover to his bride;
And over us both there broods the wing
Of the angel at her side.
permission.
SONG OF THE SEAMSTRESS

By Richard Realf
It is twelve o’clock by the city’s chime,

And my task is not yet done;
Through two more weary hours of time
Must my heavy eyes ache on.
I may not suffer my tears to come,
And I dare not stop to feel;
For each idle moment steals a crumb
From my sad to-morrow’s meal.
It is very cold in this cheerless room,

And my limbs are strangely chill;
My pulses beat with a sense of doom,
And my very heart seems still;
But I shall not care for this so much,
If my fingers hold their power,
And the hand of sleep forbears to touch
My eyes for another hour.
I wish I could earn a little more,

And live in another street,
Where I need not tremble to pass the door,
And shudder at all I meet.
’Tis a fearful thing that a friendless girl
Forever alone should dwell
In the midst of scenes enough to hurl
A universe to hell.
God knows that I do not wish to sink

In the pit that yawns around;
But I cannot stand on its very brink,
As I could on purer ground;
I do not think that my strength is gone,
Nor fear for my shortening breath;
But the terrible winter is coming on,
And I must not starve to death.
I wish I had died with sister Rose,

Ere hunger and I were mates;
Ere I felt the grip of the thought that grows
The hotter the more it waits.
I am sure that He whom they curse to me,
The Father of all our race,
Did not mean the world He made to be
Such a dark and dreary place.
I would not mind if they’d only give

A little less meager pay,
And spare me a moment’s time to grieve,
With a little while to pray.
But until these far-off blessings come,
I may neither weep nor kneel;
For, alas! ’twould cost me a precious crumb
Of my sad to-morrow’s meal.
permission.
SONG OF THE INDIAN MOTHER

By James Gowdy Clark
Gently dream, my darling child,

Sleeping in the lonely wild;
Would thy dreams might never know
Clouds that darken mine with woe;
Oh! to smile as thou art smiling,
All my hopeless hours beguiling
With the hope that thou mightst see
Blessings that are hid from me.
CHORUS
Lullaby, my gentle boy,
Sleeping in the wilderness,
Dreaming in thy childish joy
Of a mother’s fond caress,—
Lullaby, lullaby.
Sleep, while gleams the council fire,
Kindled by thy hunted sire:
Guarded by thy God above,
Sleep and dream of peace and love:
Dream not of the band that perished
From the sacred soil they cherished,
Nor the ruthless race that roams
O’er our ancient shrines and homes.
Sleep, while autumn glories fly,

’Neath the melancholy sky,
From the trees before the storm,
Chased by winter’s tyrant form:
Oh! ’tis thus our warriors, wasted,
From their altars torn and blasted,
Followed by the storm of death,
Fly before Oppression’s breath.
Sleep, while night hides home and grave,

Rest, while mourn the suff’ring brave,
Mourning as thou, too, wilt mourn,
Through the future, wild and worn;
Bruised in heart, in spirit shaken,
Scourged by man, by God forsaken,
Wandering on in war and strife,
Living still, yet cursing life.
Could thy tender fancy feel

All that manhood will reveal,
Couldst thou dream thy breast would share
All the ills thy fathers bear,
Thou wouldst weep as I am weeping,
Tearful watches wildly keeping,
By the silver-beaming light
Of the long and lonely night.
(Repeat Chorus)
OLD TIMES
By Gerald Griffin
Old times! old times! the gay old times!

When I was young and free,
And heard the merry Easter chimes
Under the sally tree.
My Sunday palm beside me placed,
My cross upon my hand;
A heart at rest within my breast,
And sunshine on the land!
Old times! old times!
It is not that my fortunes flee,

Nor that my cheek is pale;
I mourn whene’er I think of thee,
My darling native vale!
A wiser head I have, I know,
Than when I loitered there;
But in my wisdom there is woe,
And in my knowledge care.
I’ve lived to know my share of joy,

To feel my share of pain;
To learn that friendship’s self can cloy,
To love and love in vain;
To feel a pang and wear a smile,
To tire of other climes;
To love my own unhappy Isle,
And sing the gay old times!
And sure the land is nothing changed;

The birds are singing still,
The flowers are springing where we ranged,
There’s sunshine on the hill.
The sally waving o’er my head
Still sweetly shades my frame;
But oh! those happy days are fled,
And I am not the same.
Oh, come again, ye merry times!

Sweet, sunny, fresh and calm;
And let me hear those Easter chimes,
And wear my Sunday palm.
If I could cry away mine eyes,
My tears would flow in vain;
If I could waste my heart in sighs,
They’ll never come again!
TWILIGHT FANCIES
By Eliza A. Pittsinger
Softly flit the fairy fancies

Through the sunlight of my brain,
Weaving webs of weird romances
In a laughing, joyous strain—
Gently creeping,
Gaily leaping,
Twilight revels strangely keeping
In my brain.
Ere the evening lamps are lighted,

While my soul is wrapt in thought,
Wait they not to be invited,
Quite unwelcome and unsought—
Never sitting,
Ever flitting,
All the earnestness outwitting
Of my thought.
Thus to have my being haunted
By these fairies, all astray,
By these elfin-sprites enchanted,
Is a spell upon my way,
That shall borrow
For the morrow,
All the pleasure and the sorrow
Of to-day.
In my hours of quiet musing,

By these phantoms thus caressed,
I have lost the right of choosing
As I ought, my favored guest—
Uninvited,
Often slighted,
Come they when the lamps are lighted
For a guest.
Thus they come, the fairy fancies,

Laughing, flitting through my brain,
Weaving webs of weird romances,
In a wayward, joyous strain—
Gaily creeping,
Madly leaping,
Even now their revels keeping
In my brain.
THE SONG OF THE FLUME[16]

By Anna M. Fitch
Awake, awake! for my track is red,

With the glow of the coming day;
And with tinkling tread, from my dusky bed,
I haste o’er hill away,
Up from the valley, up from the plain,
Up from the river’s side;
For I come with a gush, and a torrent’s rush,
And there’s wealth in my swelling tide.
I am fed by the melting rills that start

Where the sparkling snow-peaks gleam,
My voice is free, and with fiercest glee
I leap in the sun’s broad beam;
Tho’ torn from the channels deep and old,
I have worn through the craggy hill,
Yet I flow in pride, as my waters glide,
And there’s mirth in my music still.
I sought the shore of the sounding sea,

From the far Sierra’s height,
With a starry breast, and a snow-capped crest
I foamed in a path of light;
But they bore me thence in a winding way,
They’ve fettered me like a slave,
And as scarfs of old were exchanged for gold,
So they barter my soil-stained wave.
Thro’ the deep tunnel, down the dark shaft,

I search for the shining ore;
Hoist it away to the light of day,
Which it never has seen before.
Spade and shovel, mattock and pick,
Ply them with eager haste;
For my golden shower is sold by the hour,
And the drops are too dear to waste.
Lift me aloft to the mountain’s brow,

Fathom the deep “blue vein,”
And I’ll sift the soil for the shining spoil,
As I sink to the valley again.
The swell of my swarthy breast shall bear
Pebble and rock away,
Though they brave my strength, they shall yield at length,
But the glittering gold shall stay.
Mine is no stern and warrior march,
No stormy trump and drum;
No banners gleam in my darkened stream,
As with conquering step I come;
But I touch the tributary earth
Till it owns a monarch’s sway,
And with eager hand, from a conquered land,
I bear its wealth away.
Awake, awake! there are loving hearts

In the lands you’ve left afar;
There are tearful eyes in the homes you prize
As they gaze on the western star;
Then up from the valley, up from the hill,
Up from the river’s side;
For I come with a gush, and a torrent’s rush,
And there’s wealth in my swelling tide.
THE WEST
By Annie Elizabeth Cheney
Wings that are glancing, wings of my soul,

That speeding like arrows fly to their goal;
Wings that have cut the keen ethers above,
O carry me on to the West of my love!
The West it is magic, perspective and fire,

Its peaks are like daggers thrust up by desire;
It is Tyre, it is Sidon and Ophir in one,
This land by the waters, this land of the sun.
—From “Dreams of Hellas.”
THE MOON-CRADLE
By Kate Wisner M’Cluskey
The little, the yellow moon-cradle
Is swaying, is swinging slow;
And the tiny white star-tapers burning
Have flickered their lights down low;
The night has the cloud-curtains ready,
She is holding them draped on her breast,
For the dear little, queer little babe in the moon
Will have sunk to rest in the west.
Hush, baby, hush!
Mother’s heart aches for the joy that she takes
In holding you close to her breast!
Perhaps in the yellow moon-cradle

A little cold baby may be;
And the tiny white star-tapers burning
May be sad for some mother to see;—
O night-angel! drop the cloud-curtain
While the gleaming bed’s caught in that tree,
For not even to the rest in the beautiful west
Will I let my babe go from me!
Sleep, sleep, my sweet!
Are you warm, little feet?
Close to my heart you will be!
GREEN THINGS GROWING

By Dinah Maria Mulock
Oh, the green things growing, the green things growing,

The faint sweet smell of the green things growing!
I should like to live, whether I smile or grieve,
Just to watch the happy life of my green things growing.
Oh, the fluttering and the pattering of those green things growing.
How they talk each to each, when none of us are knowing
In the wonderful white of the weird moonlight
Or the dim, dreary dawn when the cocks are crowing.

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Essentials of Economics 4th Edition

Hubbard Test Bank

10.1 Is Any Firm Ever Really a Monopoly?

2) A monopoly is a seller of a product

3) If we use a narrow definition of monopoly, then a monopoly is defined as a firm

6) A monopoly is characterized by all of the following except

11) Compared to a monopolistic competitor, a monopolist faces

12) A monopoly differs from monopolistic competition in that

14) Consider the following characteristics:

15) Few firms in the United States are monopolies because

17) A narrow definition of monopoly is that a firm is a monopoly if it can ignore

18) Using a broad definition, a firm would have a monopoly if

20) A monopoly firm is the only seller of a good or service that

1) To maintain a monopoly, a firm must have

2) Which one of the following about a monopoly is false?

3) A local electricity-generating company has a monopoly that is protected by an entry barrier

6) An example of a monopoly based on control of a key resource is

8) Governments grant patents to encourage

9) Governments grant patents to

11) One reason patent protection is vitally important to pharmaceutical firms is

18) What is a network externality?

20) For a natural monopoly to exist

21) In a natural monopoly, throughout the range of market demand

32) Network externalities

46) If a restaurant was a natural monopoly, its

55) Provide two examples of a government barrier to entry?

1) The demand curve for the monopoly's product is

8) Refer to Figure 10-2. To maximize profit, the firm will produce

23) Refer to Figure 10-4. What is the profit-maximizing/loss-minimizing output level?

29) A monopoly firm's demand curve

30) Which of the following is true for a monopolist?

THE FORTUNATE ISLES

You sail and you seek for the Fortunate Isles,

These Fortunate Isles they are not so far,

And what are the names of the Fortunate Isles?

—Copyright by Harr Wagner Co., San Francisco, and used by kind

Sound! sound! sound!

Fret! fret! fret!

Surge! surge! surge!

Sweep! sweep! sweep!

—Copyright by Harr Wagner Co., San Francisco, and used by kind

THE DEAD MILLIONAIRE

The gold that with the sunlight lies

He got some gold, dug from the mud,

—Copyright by Harr Wagner Co., San Francisco, and used by kind

I reckon him greater than any man

And wisest he in this whole wide land

So whether to wander the stars or to rest

—Copyright by Harr Wagner Co., San Francisco, and used by kind

THE VOICE OF THE DOVE

Come, listen, O Love, to the voice of the dove,

And all day long you can hear him say

Now what is thy secret serene, gray dove,

—Copyright by Harr Wagner Co., San Francisco, and used by kind

WHERE THE WEST BEGINS

Out where the handclasp’s a little stronger,

Out where the skies are a trifle bluer,

Out where the world is in the making,

AS I CAME DOWN FROM LEBANON

As I came down from Lebanon,

As I came down from Lebanon,

As I came down from Lebanon,