Test22008 - Page 1 of 5 Last Name: _ First Name: _ Student...

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

View Full Document Right Arrow Icon
Page 1 of 5 Last Name: ____________________ First Name: ____________________ Student Number: ________________ Economics 100 Professor James E. Pesando Term Test 3 – December 5, 2008 Length: 50 minutes Answer ALL questions in the space provided Aids: Pen/ Pencil and non-programmable calculator ______________________________________________ please enter the multiple choice answers in the box below : 1 2 3 4 5 examiner’s report: question points 1 2 3 4 5 total
Background image of page 1

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

View Full DocumentRight Arrow Icon
Page 2 of 5 Part I (20 points) A monopolist is in long-run equilibrium and earning economic profits. The marginal cost and the average total cost for producing each unit of output equal $10. a) In an appropriate diagram, show the price, output and the monopolist’s profit. Show, also, the allocatively efficient level of output. b) The government decides to give the monopolist a $10 subsidy for each unit of output that the monopolist produces. Will the monopolist now produce the revenue-maximizing level of output? Explain your answer with the help of a diagram.
Background image of page 2
Page 3 of 5 Part II (22 points) The market for wheat is perfectly competitive. At present, the representative firm is
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.

Page1 / 5

Test22008 - Page 1 of 5 Last Name: _ First Name: _ Student...

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