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ARE 100B - Midterm 1 Key, version C (lavender)

# ARE 100B - Midterm 1 Key, version C (lavender) - ARE 100B M...

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Unformatted text preview: ARE 100B M. Whitney YOURNAME:-:~ ________ ====::==========~ \ FIRST MIDTERM This exam has two sections. Section A consists of 10 multiple-choice questions, each worth 10 points. Total possible points in Section A = 100. SPRING 2009 Section B consists of 5 problems each worth 30 points. Partial credit is given for correct approach even if final answer is incorrect, so show your work! Total possible points in Section B == 150. Total points in this exam: 250 SECTION A 1. Which of the strategies below works best if customers are identical in their preferences for goods? a. Bundling € > Two-part tariff c. Both a and b. d. Neither a nor b. Questions 2 and3 refer to the info below. A competitive fInn's annual total costs are: TC = 2500 + 200q + q2 2. In long-run equilibrium, how many units of output does this fInn produce? a. 10 b.25 (2)50 ([ 100 e. None of the above. 3. What is the long-run equilibrium price of this good? a.\$200 b. \$210 c.\$250 @)\$300 e.\$400 f. None of the above. 4. A monopolist raised its product's price from \$100 to \$120, but quantity sold also increased at the same time. Under which pricing strategy below would this outcome be likely? a. Intertemporal price discrimination <EJ Peak-load pricing c. Second-degree price discrimination d. All of the above. e. None of the above. 5. For a monopolist, which of the following pricing strategies results in an efficient outcome, with no deadwe~tloss? ® First-degree (perfect) price discrimination b. Second-degree price discrimination c. Third-degree price discrimination d. All of the above. e. None of the above, since all monopoly pricing strategies create a deadweight loss. 6. A monopolist charges \$150 per treatment for a patented drug it sells. The cost of producing the drug is constant at \$30 per treatment. What is the implied elasticity of demand for this drug? G)-1.25 b. -1.5 c. -2 d. -3 e. None of the above. 7. Which of the pricing strategies below is common in the book publishing industry?...
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ARE 100B - Midterm 1 Key, version C (lavender) - ARE 100B M...

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