ex2s10l - ECO 304K UNIQUE # 3315 INTRODUCTORY...

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ECO 304K UNIQUE # 3315 INTRODUCTORY MICROECONOMICS SPRING 2010 MIDTERM EXAM #2 Be sure you follow directions very carefully. Section I has 8 problems on three pages. Do all 8 of the problems from that section. Section II has 2 problems on one page. Do only 1 of the 2 problems from that section. Section III has 2 problems on 2 pages. Do only 1 of the 2 problems from that section. Failure to do a sufficient number of problems in any section, because of missing pages, or not following directions, will result in complete loss of points for that problem. Doing extra problems in any section will not gain you anything, and take time away from working other problems. All answers must be put on the answer document. You do not need to return this document with the questions so nothing written on this document will be graded. Please keep answers in the section devoted to that problem. Be sure your name and all your answers are on the answer document. SECTION I MULTIPLE CHOICE DO ALL 8 QUESTIONS 1. One way that perfect competition and monopoly differ is that in a) perfect competition, there is no difference between firm and industry demand. b) perfect competition, there is only one firm in the industry. c) monopoly, one firm faces the market demand curve. d) monopoly, one firm produces less than the total market quantity supplied. e) monopoly, firm chooses the output that maximizes its profit. 2. A firm is currently producing a quantity of output that is on the decreasing part of the firms LRAC curve. Which of the following must be true? I. The firm is not in LR competitive equilibrium II. The firm is producing where there are decreasing returns to scale III. The firm is producing before the point of diminishing returns. a) All of them are true b) Only II is true c) Only I and II are true d) Only III is true e) Only I is true.
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3. If many firms in a monopolistically competitive industry are making positive economic profits in the short run, we would expect a) entry causing the firm’s MC to shift b) entry causing the firm’s demand to decrease. c)
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This note was uploaded on 02/28/2011 for the course ECO 304K taught by Professor Hickenbottom during the Spring '10 term at University of Texas.

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ex2s10l - ECO 304K UNIQUE # 3315 INTRODUCTORY...

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