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Unformatted text preview: Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman Final Examination You have until 12:30pm to complete the exam, be certain to use your time wisely. For multiple choice questions, mark your answer on your scantron sheet. Choose only one answer for each multiple choice question; if more than one letter is chosen for a question it will be marked wrong. Write your answers for the short answer section directly on the exam. For the short answer questions, show your work clearly, place a box around final answers and be certain to label any graphs you draw. Final answers may be left as fractions. Non-graphing calculators may be used but they should not be necessary. Remember to put your name and ID number on both the exam (in the spaces provided below) and on the scantron sheet. Good luck! Name: ID Number: Section: SECTION I: MULTIPLE CHOICE (60 points) 1. The minimum of a firms average cost curve is at $20 and the minimum of the firms average variable cost curve is at $10. If the firm is operating in a competitive market where the price is $15, then in the short run: (a) The firm will shut down. (b) The firm will earn positive profits. (c) The firm will have positive producer surplus. (d) The firm will be producing more than it would if the price were $20. 2. An industry has three firms in it. Firms A and B each have individual supply curves given by S ( p ) =- 10 + 2 p and firm C has a supply curve given by S ( p ) = 4 p . The industry supply curve will have a kink at a price of: (a) $5. (b) $10. (c) $.25. (d) $.25 and $5. 3. If a monopoly can use first degree price discrimination, the deadweight loss will be than if the monopoly cannot price discriminate and profits will be than if the monopoly cannot price discriminate. (You can assume the monopoly has constant marginal costs and the every consumers demand curve is a downward sloping line.) (a) Greater than, less than. (b) Greatern than, greater than. (c) Less than, less than. (d) Less than, greater than. 2 Final Examination 4. A major difference between a competitive firm and a monopoly is that: (a) Monopolies operate where marginal revenue equals marginal cost, competitive firms do not. (b) Monopolies earn profits, competitive firms do not. (c) Competitive firms operate where marginal revenue equals marginal cost, monopolies do not. (d) Competitive firms operate where price equals marginal cost, monopolies do not. 5. If a production technology exhibits increasing returns to scale, then producing 100 units of output will cost as producing 50 units of output. (a) Twice as much....
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- Fall '08