TA_practice - 1. The difference between price searchers and...

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1. The difference between price searchers and price takers are, a. Price searchers have a horizontal marginal cost curve and price takers have a upward sloping cost curve b. Price searchers produce where MC=MR, price takers do not c. Any price searchers will always make more profits than a price taker. d. In absence of externalities, price searchers induce deadweight loss. Price takers do not. e. None of the above 2. A price searcher chooses between, a. high price/ low quantity vs. high price/ high quantity b. low price/ low quantity vs. high price/ high quantity c. low price/ high quantity vs. low price/ low quantity d. high price/ low quantity vs. low price/ high quantity e. None of the above 3. If an increase in quantity from Q1 to Q2 decreases revenue then, a. A monopolist will never produce the quantity Q2. b. A competitive market will never produce the quantity Q2. c. This is an inelastic portion of the demand curve. d. a. and c. only. e. none of the above. 4. Natural Monopolies are situations where, a. There is no dead weight loss b. They are the result of natural selection c. Only one firm can be profitable in the industry d. a. and b. only e. none of the above. 5. Price discrimination does which of the following relative to simple monopoly pricing, a. Increases producer surplus b. Decreases consumer surplus c. Decreases deadweight loss d. All of the above e. None of the above
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Consider the following information where MC represents marginal cost and MV represents marginal value. Unit MC MV 1 5 65 2 10 60 3 15 55 4 20 50 5 25 45 6 30 40 7 35 35 8 40 30 6. Suppose the industry is competitive. What is the equilibrium quantity and producer surplus respectively? a. 8 units and $240 b. 7 units and $105 c. 7 units and $245 d. 5 units and $150 e. 5 units and $225 7. Suppose now instead of being competitive, there is a single producer in the market (i.e. monopoly). What quantity will they produce and what is the producer surplus respectively? a. 8 units and $240 b. 7 units and $105 c. 7 units and $245 d. 5 units and $150 e. 5 units and $225 8. Now suppose that this table represents the cumulative marginal costs for an industry with a lot of firms. That is, each firm is a price taker. If the firm’s get together and collectively paid for a lobbyist to lobby for a price floor what price floor would they (the firms) prefer? a. $35 b. $40 c. $45 d. $55 e. Any restrictive price floor causes deadweight loss. Therefore the firms would never want to lobby for any price restriction.
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9. Which of the following situations will definitely not result in a price searcher? a. A corn farmer who is a relatively small producer in a very competitive industry buys his neighbor’s farm (of the same size). b.
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TA_practice - 1. The difference between price searchers and...

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