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Unformatted text preview: Econ 100B (Grossman)—Spring 2010 Final Exam—Version A June 9, 2010 Instructions: This is a closed-book, closed-notes exam. No calculators or electronic devices are allowed. Please turn off and put away all phones and other electronic devices. There are 14 multiple-choice questions and two free-response questions. Answer as many as you can in the time allowed. If you get stuck on something, I suggest moving on and coming back later when/if you have time. If you have a question, please raise your hand. Good luck! Multiple choice – 29 out of 50 pts. (14 qns., 2 pts. each + 1) Answer these questions on your Scantron. Your score will only be based on the marks on your Scantron. You will not receive any credit for anything written on your exam paper. You will receive 1 point for correctly writing (and bubbling in) your name, perm number, version (A,B,C, or D), and TA’s name on your Scantron. 1. Keiko has $100, but there is a 50% chance she will lose all her money in the stock market. Ndola offers to fully insure Keiko’s loss for a premium of $36. If Keiko’s utility over wealth is given by u ( w ) = √ w , which of the following is true? I. Keiko should accept Ndola’s offer II. Ndola will have positive expected profit if Keiko accepts (a) Both (b) Just I (c) Just II (d) Neither 2. Oxnard has a competitive market for strawberries. The inverse demand for strawberries is p = 12- q 5 and the supply is q = 10 + 5 p . What is the equilibrium price and quantity? (a) ( p,q ) = (12 , 70) (b) ( p,q ) = (5 , 35) (c) ( p,q ) = (24 , 7) (d) ( p,q ) = (10 , 3 . 5) 3. Manglomerate has a monopoly on mangoes in India. It has no fixed costs and faces a marginal cost of 2. The inverse demand for mangoes in India is p = 10- q . What are the company’s profits? (a) 9 (b) 24 (c) 16 (d) 21 4. (cont. from above) A blight kills all the mango trees in the US, so the US opens up its market to imported mangoes and Manglomerate begins selling as a monopolist in the American market as well. The inverse American demand for mangos is p a = 16- q a 2 . If it engages in multimarket price discrimination, how does the US price compare to the price in India? (a) The US price is 1 lower (b) The US price is 3 higher (c) They are the same (d) The US price is 2 lower 1 5. The inverse demand function for passenger airplanes is p = 300- 3 Q , where Q is the total quantity of airplanes. Two airplane manufacturers, Boeing and Airbus operate as duopolists, both withairplanes....
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This note was uploaded on 05/08/2011 for the course ECON 100B taught by Professor Kilenthong during the Spring '08 term at UCSB.
- Spring '08