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BusEcon_Exam3_SMP - 1 ECONOMIC ANALYSIS FOR MANAGERIAL...

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1 ECONOMIC ANALYSIS FOR MANAGERIAL DECISIONS Sample Questions for Final Exam 1. An economics tutor identifies five students who want lessons. John is willing to pay $10 per lesson, Tina $8 per lesson, Susan $6, Fred $4 and Ed $2. University policy maintains that tutors can charge any price they wish but the price must be the same for all students. The economics tutor figures that the marginal (opportunity) cost of his time is constant at $4 (per lesson). What consumer surplus would result if he chose to maximize his net revenue (that is revenue minus his opportunity cost)? ( Hint : Only approximate calculations will be required for this question) a. $0 b. $2 c. $8 d. $12 e. $14. 2. An unregulated monopoly in the short run will try to produce where: a. revenue is maximized. b. costs are minimized. c. marginal revenue is greater than marginal cost. d. marginal revenue is equal to marginal cost as long as price is greater than average variable cost. e. marginal revenue is equal to marginal cost as long as price is equal to marginal revenue.
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