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Quiz 4 Ec21 S2016.pdf

Quiz 4 Ec21 S2016.pdf - Dartmouth ID(not name Economics 21...

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Page 1 of 8 Dartmouth ID ( not name): ___________________________ Economics 21 Spring 2016 Quiz 4 Instructions: Show all your work! (no credit for correct answers unless the intermediate steps are shown) You can earn 45 points in total. All items (including the axes) in a graph need to be labeled to get full credit There are extra pages at the end in case you need additional space Do not remove the staple or tear out pages Books, notes, your own calculators or cell phones are not allowed. You are only allowed to use the calculator provided by me. Good luck!
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Page 2 of 8 1. Short Answer Questions (17 points) a. Define “Nash equilibrium.” b. Define “Minimum Efficient Scale.” c. List the conditions that need to hold for price discrimination to be possible.
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Page 3 of 8 d. Suppose a monopolist is the only seller of a Giffen good. (Reminder: A Giffen good has an upward-sloping demand curve). The profit-maximizing quantity of the Giffen good sold is 100 units and the resulting price is $8/unit. Is the marginal revenue of the last unit sold less than, equal to, or greater than $8? Carefully explain your answer.
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