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Unformatted text preview: Econ 100B (Grossman)—Spring 2010 Midterm 2—Version A May 13, 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 8 multiple-choice questions and two free-response questions. Answer as many as you can in the time allowed. I do not expect everyone to be able to answer all questions. 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 – 25 out of 50 pts. (8 qns., 3 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 extra point for correctly writing your TA’s name and for correctly writing and bubbling in your name, perm number, and version (A,B,C, or D) on your Scantron. 1. A profit-maximizing monopolist faces a demand function q = 50- p 2 and has a constant marginal cost of 20. What quantity does she choose and what is the resulting deadweight loss? (a) q = 16 and DWL = $320 (b) q = 15 and DWL = $225 (c) q = 40 and DWL = $80 (d) q = 20 and DWL = $400 2. A profit-maximizing monopolist charges the price p = 12. At that price, the price elasticity of demand for her output is- 3. What is her marginal cost? (a) MC = 9 (b) MC = 8 (c) MC = 3 (d) MC = 4 3. Pfiber is a drug company that has a patent on Artichox, a highly specialized drug for regulation of the digestive tract. The inverse demand for Artichox is P = 200- q 2 , and Pfiber’s cost function is...
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- Spring '08
- Supply And Demand, Blair, inverse demand