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? a. -996 b. 0 c. 1,296 d. 1,568 e. none of the above 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: a. intertemporal price discrimination. b. third degree price discrimination. c. two-part tariff. d. bundling. e. none of the above. 4. Which of the following is true for both perfect and monopolistic competition? a. Firms produce a differentiated product. b. Firms face a downward sloping demand curve. c. Firms produce a homogeneous product. d. There is freedom of entry and exit in the long run. 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? a. 1. b. 0. c. Infinity. d. Two times the price. 7. The situation in which buyers are able to affect the price of a good is referred to as ______________ power. a. monopoly b. purchasing c. monopsony d. countervailing 8. If a monopolist's profits were taxed away and redistributed to its consumers, a. inefficiency would remain because output would be lower than under competitive conditions. b. inefficiency would remain, but not because output would be lower than under competitive conditions. c. efficiency would be obtained because output would be increased to the competitive level. d. efficiency would be obtained because output would be increased and profits removed. 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. 10. If a monopolist sets her output such that marginal revenue, marginal cost and average total cost are equal, economic profit must be: a. negative. b. positive. c. zero. d. indeterminate from the given information. 11. The Cournot equilibrium can be found by treating _____ as a pair of
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This note was uploaded on 05/20/2010 for the course MARKETING 107 taught by Professor Vivian during the Spring '10 term at SCA NC.

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sample_final_intermediate - question and answer -...

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