Econ 102 HW 8 - Homework 8 Submitted by DUNLEAVY...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 5/7/2015 Homework 8 Submitted by DUNLEAVY, COLLIN (CPD5141) on 4/29/2015 1:31:49 PM Points Awarded Points Missed Percentage 16.00 0.00 100% 1. Consumer surplus is A) the difference between the price the consumers pay for a good and the firm’s cost of producing the good B) the difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item C) the difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay D) the difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item Points Earned: 0.5/0.5 Correct Answer(s): C 2. Economists generally assume that firms attempt to maximize A) total revenue B) the number of units sold C) marginal revenue D) total economic profits Points Earned: 0.5/0.5 Correct Answer(s): D 3. Which of the following is a characteristic of perfect competition? A) Easy entry and exit B) Few firms C) Differentiated products D) Advertising done by individual firms E) None of the above Points Earned: 0.5/0.5 Correct Answer(s): A 4. The perfectly competitive firm cannot influence the market price because A) it has market power B) its production is too small to affect the market C) the government determines a legal price D) its costs are too high Points Earned: 0.5/0.5 Correct Answer(s): B https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 1/10 5/7/2015 Homework 8 5. When considering perfect competition the absence of entry barriers implies that A) no firm can enter the industry B) it costs $0 to start a new business in perfectly competitive markets C) all firms will earn economic profit D) firms can enter and leave the industry without serious impediments Points Earned: 0.5/0.5 Correct Answer(s): D 6. For a perfectly competitive firm, the short-­run break-­even point occurs at the level of output where A) P > MR = MC. B) MR = P > MC. C) MR < P = MC. D) P = MC = ATC. Points Earned: 0.5/0.5 Correct Answer(s): D 7. One problem associated with a monopoly firm is that it A) produces too little output but also charges a low price B) produces too much output and charges too low a price C) restricts output and charges a relatively higher price than a purely competitive industry D) is just as good as a purely competitive firm in terms of output and price Points Earned: 0.5/0.5 Correct Answer(s): C 8. If a single-­price monopolist can sell 5 units at price of $200 per unit and 6 units at a price of $180 per unit, its marginal revenue at an output of 6 is A) $-­20 B) $20 C) $180 D) $1080 E) $80 Points Earned: 0.5/0.5 Correct Answer(s): E 9. Which of the following conditions hold true for both the perfectly competitive firm and the monopoly at the profit-­maximizing output level? A) MR = P B) MC = ATC C) MC = P https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 2/10 5/7/2015 Homework 8 D) MR = MC Points Earned: 0.5/0.5 Correct Answer(s): D 10. When comparing perfect competition and monopoly, a major assumption made is that A) the monopolist has the same supply curve as the competitive industry B) consumers don’t know whether the industry is competitive or monopolized C) the marginal costs of production are the same under monopoly as under perfect competition. Points Earned: 0.5/0.5 Correct Answer(s): C 11. In Graph 1, the profit-­maximizing output and price for this monopoly are A) 10,000 units at a price of $10 per unit. B) 10,000 units at a price of $5 per unit. C) 13,000 units at a price of $7 per unit. D) 12,000 units at a price of $8 per unit. Points Earned: 0.5/0.5 Correct Answer(s): A 12. In Graph 1, the profit maximizing monopoly will A) try to increase its costs of production B) make a profit of $30,000. C) make a profit of $100,000. D) incur a loss of $20,000. Points Earned: 0.5/0.5 https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 3/10 5/7/2015 Homework 8 Correct Answer(s): B 13. Suppose the (inverse) demand function for a single-­price monopoly is P = 350 – 2Q. This means that the marginal revenue function for the monopolist is MR = 350 – 4Q. Assume the marginal cost function is given by MC = 3Q. These functions are pictured above in Graph 2. Find the Q* that the monopoly will produce. Hint: Q* is found be setting MR = MC. A) Q* = 87.5 B) Q* = 50 C) Q* = 70 D) Q* = 100 Points Earned: 0.5/0.5 Correct Answer(s): B 14. Now find the P* price that the monopolist will charge. This is found by finding the height of the demand curve (willingness to pay) at the Q* quantity you found in the previous question. A) P* = 175 B) P* = 150 C) P* = 250 D) P* = 210 Points Earned: 0.5/0.5 Correct Answer(s): C https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 4/10 5/7/2015 Homework 8 15. Suppose that on Graph 2, we were to label this P* Q* combination as point “M”. Which of the following pictures shows the correct location for point “M” for this monopoly? A) Picture A B) Picture B C) Picture C D) Picture D Points Earned: 0.5/0.5 Correct Answer(s): D 16. Which of the following is NOT a characteristic of monopolistic competition? A) Large number of sellers B) Differentiated products C) Advertising done by individual firms D) Barriers to entry https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 5/10 5/7/2015 Homework 8 Points Earned: 0.5/0.5 Correct Answer(s): D 17. In a long-­run monopolistically competitive equilibrium, A) P = ATC, and ATC is not at its minimum value. B) P = ATC, and ATC is at its minimum value. C) P > ATC, and ATC is at its minimum value. D) P > ATC, and ATC is not at its minimum value. Points Earned: 0.5/0.5 Correct Answer(s): A 18. Advertising by monopolistically competitive firms can do all of the following EXCEPT A) lower the price of the good B) help differentiate a firm's product C) give the consumer information about the firm’s products D) result in increased profits for the advertising firm Points Earned: 0.5/0.5 Correct Answer(s): A 19. The demand curve for the product of a monopolistically competitive firm A) is perfectly inelastic B) is downward sloping and relatively inelastic C) is downward sloping and relatively elastic D) is perfectly elastic Points Earned: 0.5/0.5 Correct Answer(s): C 20. In the long run equilibrium, a monopolistic competitor will produce to the point at which A) actual average total costs are at the minimum of possible ATC B) actual average total costs are higher than the minimum of possible ATC C) resources are used at the lowest possible cost D) at the lowest possible price Points Earned: 0.5/0.5 Correct Answer(s): B 21. https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 6/10 5/7/2015 Homework 8 Examine Graph 3. The profit-­maximizing output and price for this monopolistically competitive firm is A) 100 and $19 B) 160 and $13 C) 160 and $16 D) 210 and $16 Points Earned: 0.5/0.5 Correct Answer(s): C 22. Examine Graph 3. The total revenue earned by this monopolistically competitive firm is A) $2,560 B) $1,600 C) $480 D) $1,900 Points Earned: 0.5/0.5 Correct Answer(s): A 23. Examine Graph 3. The total profit earned by this monopolistically competitive firm is A) $2,560 B) $1,600 C) $480 D) $1,900 Points Earned: 0.5/0.5 Correct Answer(s): C 24. https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 7/10 5/7/2015 Homework 8 Pictured here is Axel. Based on current market conditions, he just opened up a pizza restaurant that serves families with young children. Restaurants are generally considered to belong in the market structure of monopolistic competition, so under normal market conditions, Axel can expect A) short run positive economic profits and long run zero economic profits B) short run positive economic profits and long run positive economic profits C) short run economic losses and long run economic losses D) short run positive economic profits and long run economic losses Points Earned: 0.5/0.5 Correct Answer(s): A 25. In oligopoly, any action by one firm to change the price, output, or quality will cause A) a reaction by other firms B) a cartel to form C) a profit gain for the other firms D) loss of market share by the acting firm Points Earned: 0.5/0.5 Correct Answer(s): A 26. When considering strategic dependence, managers in oligopoly firms must A) eliminate any barriers to entry if they hope to make short-­run profits B) advertise heavily in order to differentiate their product C) anticipate the reaction of rival firms D) establish many varieties of their products to cover the spectrum of consumer tastes Points Earned: 0.5/0.5 Correct Answer(s): C 27. A horizontal merger involves A) the joining of two firms at different stages of the production process B) the separation of management from ownership https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 8/10 5/7/2015 Homework 8 C) the joining of two firms selling similar products D) the exchange of debt for stock E) a decision by a firm to become a publicly traded company Points Earned: 0.5/0.5 Correct Answer(s): C 28. How do economies of scale contribute to the development of an oligopoly? A) Economies of scale make it illegal for new firms to enter B) Economies of scale make small-­scale producers inefficient, so only the largest firms have low costs that allow them to compete C) Economies of scale are based on control of a key resource, without which other firms cannot enter an industry D) Economies of scale are guaranteed when a patent is granted since only one firm can create the product, and they’ll create a lot of that product Points Earned: 0.5/0.5 Correct Answer(s): B 29. Based on the table shown, the four-­firm concentration ratio in this industry equals what percentage of annual sales? A) 33 percent B) 40 percent C) 60 percent D) 100 percent Points Earned: 0.5/0.5 Correct Answer(s): C 30. A cartel is a form of A) collusion B) vertical merger C) horizontal merger D) producer surplus https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D7818251450465490… 9/10 5/7/2015 Homework 8 Points Earned: 0.5/0.5 Correct Answer(s): A 31. Read the article posted at http://www.cnbc.com/id/101668360. (If you’ve paid very close attention in class, you’ll recognize the name of the town and the person in the article). Which of the following is true, according to the article? A) When a business is damaged or destroyed by a natural disaster, the owners are financially harmed but the workers are usually not affected. B) Insurance companies usually don’t pay claims to businesses that are destroyed by natural disasters. C) Businesses are almost always able to pay their workers for up to a year even if the business remains closed due to a natural disaster. D) Most businesses could be exposed to severe weather or natural disasters and some businesses are making sure they have proper insurance to deal with unexpected events. Points Earned: 0.5/0.5 Correct Answer(s): D 32. If you are reading this question, I assume you are logged into ANGEL. While you’re here, you should go ahead and fill out the online SRTE for this class (ECON102). This is your chance to grade me as an instructor and provide valuable feedback so I can continue to improve my teaching and this course. Please fill out the SRTE before the last day of class. Thanks!!! A) Pick [C] to answer this question. B) Pick [C] to answer this question. C) Pick this answer. D) Pick [C] to answer this question. Points Earned: 0.5/0.5 Correct Answer(s): C Continue https://cms.psu.edu/Section/Assessment/Question/GradeDelivery.aspx?entryId=FA51E7D1DEAF4943907AF9C4D811A3A7&response_Id=8D781825145046549… 10/10 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern