final03v1a - Final Exam Economics 101 Fall 2003 Wallace...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Final Exam Economics 101 Fall 2003 Wallace Final Exam (Version 1) Answers 1. The marginal revenue product equals A) total revenue divided by total product (output). B) marginal revenue divided by marginal product. C) total revenue multiplied by total product (output). D) marginal revenue multiplied by marginal product. Answer: D 2. In the table above, if the wage rate is $8.00 per hour, the profit-maximizing number of workers is A) 1. B) 2. C) 4. D) 5. Answer: C 3. A firm in a competitive labor market will hire labor until the marginal revenue product of labor equals A) the firm’s marginal revenue. B) the firm’s marginal cost. C) the firm’s average cost. D) the wage rate. Answer: D 4. The present value of $100 to be received in the year 2008 is A) less than the present value of $100 to be received in 2009. B) greater than the present value of $100 to be received in 2009. C) the same as the present value of $100 to be received in 2009. D) greater than the present value of $100 to be received in 2009 if the interest rate in 2009 exceeds that in 2008; otherwise, it is less. Answer: B Quantity of labor (workers) Total revenue (dollars) Total product (units of output) 0 0 0 1 20 5 2 36 9 3 48 12 4 56 14 5 60 15
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. A fall in the interest rate A) shifts a firm’s demand curve for capital leftward. B) shifts a firm’s demand curve for capital rightward. C) results in a movement to the right and downward along a firm’s demand curve for capital. D) results in a movement to the left and upward along a firm’s demand curve for capital. Answer: C 6. A monopoly is best defined as A) an industry with only one firm and in which the good produced has no close substitutes. B) a firm that purchases its resources from only one supplier. C) an industry that sells all its output to one buyer. D) a firm that sells all its output to one buyer. Answer: A Use the following information to solve the next 4 questions about a monopolistic market. The demand for a good is given by: P = 10 – Q. A monopolist’s costs are given by: TC = 2 + 4Q. 7. Suppose a single price monopolist controls the market for this good. The monopolist’s optimal price and quantity choice is: A) PM = $7, QM = 3. B) PM = $6, QM = 4 C) PM = $5, QM = 5. D) PM = $4, QM = 6. Answer: A 8. Using your answer from the previous question, the single price monopolist’s profit is: A) $3. B) $7. C) $10. D) $13. Answer: B 9. The deadweight loss from the monopoly is: A) $6. B) $4.5 C) $8. D) $12. Answer: B 10. Now suppose that the market for this good is controlled by a perfectly price discriminating monopolist. What are the perfectly price discriminating monopolist’s profits? A) $14. B) $16. C) $18. D) $20 Answer: B
Background image of page 2
11. A major difference between a single-price monopolist and a perfectly competitive firm is that A) the monopolist can maximize profit by setting the price of the output with marginal cost. B) the monopolist can always increase its profits by increasing the price of its output.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/29/2008 for the course ECON 101 taught by Professor Hansen during the Spring '07 term at Wisconsin.

Page1 / 17

final03v1a - Final Exam Economics 101 Fall 2003 Wallace...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online