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test3_feb11 - Department of Economics University of Toronto...

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Page 1 of 8 Department of Economics Prof. Gustavo Indart University of Toronto February 11, 2005 ECO 100Y – L0101 INTRODUCTION TO ECONOMICS Midterm Test 3 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS : 1. The total time for this test is 50 minutes. 2. This exam consists of three questions. 3. This question booklet has 8 (eight) pages. 4. Aids allowed: a simple calculator. 5. Use pen instead of pencil . DO NOT WRITE IN THIS SPACE Question 1 /25 Question 2 /10 Question 3 /15 TOTAL /50 /100
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Page 2 of 8 10 20 30 40 100 200 300 400 500 Question 1 (25 marks) Consider an industry with a demand curve (D) and a marginal cost curve (MC) shown in the diagram below. If the industry is a single-price monopoly, the monopolist’s marginal revenue curve would be MR. Answer the following questions and show all your work . (Note: In all cases, you must provide numerical values for the areas representing the consumer and producer surpluses.) P MC ATC MR D Q a) If the industry is perfectly competitive, what will be the total quantity produced? At what price? What will be the area representing the consumer surplus under perfect competition?
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