1.Compared to a competitive market, a monopoly situation will produce:

A)   less output, and the sum of the consumer surplus and the producer surplus will be reduced.

B)   more output, and the sum of the consumer surplus and the producer surplus will be reduced.

C)   less output, and the sum of the consumer surplus and the producer surplus will be increased.

D)   more output, and the sum of the consumer surplus and the producer surplus will be increased.

2.Even though the producer surplus increases under a monopoly scenario, relative to one of perfect competition, the consumer surplus:

A)   decreases by a lesser amount.

B)   decreases by a greater amount.

C)   decreases by an equal amount.

D)   is unaffected.

3.When producers expend resources to establish monopoly power in a market, this is called:

A)   surplus allocation.

B)   resource rationalization.

C)   economic equilibrium.

D)   rent seeking.

答案和详解如下：

1.Compared to a competitive market, a monopoly situation will produce:

A)   less output, and the sum of the consumer surplus and the producer surplus will be reduced.

B)   more output, and the sum of the consumer surplus and the producer surplus will be reduced.

C)   less output, and the sum of the consumer surplus and the producer surplus will be increased.

D)   more output, and the sum of the consumer surplus and the producer surplus will be increased.

The correct answer was A)

A monopolist, faced with the same demand curve that would exist under perfect competition, will decrease output to the point that marginal revenue equals marginal cost. This will have the effect of reducing the sum of the consumer surplus and the producer surplus, relative to what they would have been under perfect competition. However, the size of the producer surplus increases on an absolute basis at the expense of the consumer surplus.

2.Even though the producer surplus increases under a monopoly scenario, relative to one of perfect competition, the consumer surplus:

A)   decreases by a lesser amount.

B)   decreases by a greater amount.

C)   decreases by an equal amount.

D)   is unaffected.

The correct answer was B)

The increase in the producer surplus occurs at the expense of the consumer surplus. Moreover, the consumer surplus decreases by a greater amount than the producer surplus increases, with the difference representing a deadweight loss.

3.When producers expend resources to establish monopoly power in a market, this is called:

A)   surplus allocation.

B)   resource rationalization.

C)   economic equilibrium.

D)   rent seeking.

The correct answer was D)    

When producers expend resources and time in an effort to establish a monopoly position, this behavior is described as rent seeking.