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sample_final_intermediate - question and answer

sample_final_intermediate - question and answer -...

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Intermediate Microeconomics Practice final exam 1. When a per unit tax is imposed on the sale of a product of a monopolist, the resulting price increase will a. always be less than the tax. b. always be more than the tax. c. always be less than if a similar tax were imposed on firms in a competitive market. d. not always be less than the tax. Use the following information to answer the questions below. Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve and total cost curve are given as follows: Q = 160 - 4 P TR = 40 Q - 0.25 Q 2 MR = 40 - 0.5 Q TC = 4 Q MC = 4 2. How much profit will she make? 3. Some grocery stores are now offering customers coupons which entitle them to a discount on certain items on their next visit when they go through the check-out line. This practice is called: 4. Which of the following is true for both perfect and monopolistic competition? 5. In the Cournot duopoly model, each firm assumes that a. rivals will match price cuts, but will not match price increases. b. rivals will match all reasonable price changes. c. the price of its rival is fixed. d. the output level of its rival is fixed.
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Page 2 6. What is the value of the Lerner index under perfect competition? 7. The situation in which buyers are able to affect the price of a good is referred to as ______________ power. 8. If a monopolist's profits were taxed away and redistributed to its consumers, 9. Monopolistically competitive firms have monopoly power because they a. have downward sloping demand curves. b. are great in number. c. have freedom of entry. d. are free to advertise.
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