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practicefinal - ECON 1 FINAL SUMMER 2009 SESSION B test...

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ECON 1 FINAL, SUMMER 2009, SESSION B -- test form I NAME: __________________________________ PERM: ________________________ Q 1 2 3 4 5 6 TB 15 27 36 42 45 45 1. The table above gives consumers’ total benefit (willingness to pay) for different quantities of a good. If MC = 5 (marginal cost is constant at 5), and the market is perfectly competitive, then in equilibrium, the quantity bought and sold will be _________, consumer surplus will be _________, and producer surplus will be _________. If the government imposes a price floor of 10, then in the new equilibrium, consumer surplus will be _________, producer surplus will be _________, and the deadweight loss associated with the price floor will be _________. 2. Suppose that, in some perfectly competitive industry, all potential firms have the following cost structure: TC = 15 + 0.25Q 2 , and thus MC = 0.5Q. If the current market price is 5, then each price- taking, profit-maximizing firm will choose to produce a quantity of _________. At this quantity, their average total cost will be _________, and their profit will be _________. [Problem 3 is omitted, because we didn’t cover comparative advantage this year.]
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NAME: _________________________________ 2 Q TB MB R MR 1 100 2 180 3 240 4 280 5 300 6 300 4. A monopolist faces demand based on the total benefit schedule shown in the table above. MC = 15 (marginal cost is constant at 15). Fill in the empty columns of the table (marginal benefit, revenue, and
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This note was uploaded on 08/03/2010 for the course ECON 1 taught by Professor Bergstrom during the Summer '07 term at UCSB.

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practicefinal - ECON 1 FINAL SUMMER 2009 SESSION B test...

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