Final Exam – Prep

# Final Exam – Prep - Review Test Submission Final Exam...

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5/20/16, 1 : 04 AM Review Test Submission: Final Exam – 2016 Spring Term (1... Page 2 of 18 Selected Answer: C. I . Question 2 Figure: The Monopolist III Reference: Ref 13-20 (Figure: The Monopolist III) Look at the figure The Monopolist III. If this monopolist profit-maximizes, it will produce ________units and charge a price equal to ________. Its producer surplus will be equal to ________, its consumer surplus will equal ________, and the deadweight loss is equal to ________. Selected Answer: A. 35; \$65; \$1,225; \$612.50; \$612.50 Question 3 Reference: Ref 4-34 (Table: Willingness to Pay for Peanuts) Look at the table Willingness to Pay for Peanuts. If the price of a bag of peanuts is \$4, what is the value of George's consumer surplus? Selected Answer: C. \$6

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5/20/16, 1 : 04 AM Review Test Submission: Final Exam – 2016 Spring Term (1... Page 3 of 18 Question 4 Reference: Ref 10-23 (Table: Denise's Consumption of Co ff ee and Gasoline) Look at the table Denise's Consumption of Co ff ee and Gasoline. When Denise maximizes her utility, her marginal utility per dollar spent on gasoline equals: Selected Answer: B. 0.8 utils per dollar. Question 5 If the supply curve is given by the equation P = 10 + 4Q , and the competitive market equilibrium price is \$60, then a price-ceiling set at P max = \$50 will result in a reduction in the producer surplus by _____. Selected Answer: B. \$100 Question 6 If the demand curve is given by the equation P = 185 - 10Q , and the competitive market equilibrium price is \$60, then a price-ceiling set at P max = \$50 will result in a dead-weight loss for the consumers equal to _____. Selected Answer: C. It c annot be determined with the information provided Question 7 The price in a competitive market, without any ine ciencies, maximizes the gains from trade, because ____. Selected Answer: D. Only A and B
5/20/16, 1 : 04 AM Review Test Submission: Final Exam – 2016 Spring Term (1... Page 4 of 18 Question 8 A monopolist or an imperfectly competitive firm practices price discrimination primarily to: Selected Answer: D. increase profits. Question 9 Reference: Ref 10-21 (Table: Madeline's Preferences for T-Shirts and Co ff ee) Look at the table Madeline's Preferences for T-Shirts and Co ff ee. Assume each consumption bundle provides the same level of utility for Madeline. Suppose Madeline is consuming bundle C. If she changes her purchases to bundle D, this means that she: Selected Answer: C. gives up 2 T-shirts to obtain 1 more cup of co ff ee. Question 10 Figure: Consumer Equilibrium IV Reference: Ref 10-19 (Figure: Consumer Equilibrium IV) Look at the figure Consumer Equilibrium IV. The highest level of

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5/20/16, 1 : 04 AM Review Test Submission: Final Exam – 2016 Spring Term (1...

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