# Final20102010-1_withAnswers[1] - Name Date Econ 2010 sec...

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Version 1 Page 1 Name: __________________________ Date: _____________ Econ 2010 sec. 100 Final: Version 1 Fall 2010 There are 88 questions on this exam spread over 20 pages. 1. Xavier is the only guy town selling "medical" marijuana--he is a monopolist and demand is strong. He can sell 3 tons at \$10k a ton, but if he lowers his price from \$10K a ton to \$9K a ton he can sell 4 tons. For Xavier, the marginal revenue associated with the 4th ton is A) \$8K B) \$10K C) \$9K D) \$6K Use the following to answer questions 2-3: Figure: A Profit-Maximizing Monopoly Firm 2. (Figure: A Profit-Maximizing Monopoly Firm) The profit-maximizing firm in this figure will produce ________ units of output per week. A) 300 B) 160 C) 220 D) 250

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Version 1 Page 2 3. (Figure: A Profit-Maximizing Monopoly Firm) This profit-maximizing monopoly firm's price per unit is: A) \$26. B) \$35. C) \$20. D) \$29. 4. For a market commodity ____ is exogenous and quantity is ____. For a nonmarket commodity ____ is exogenous and ____ is endogenous. (choose the best fill-ins) A) price, endogenous, price, value B) price, endogenous, quantity, price C) price, exogenous, price, quantity D) price, endogenous, quantity, value 5. Both Fred and George can buy as many Cuban cigars as they want at \$5 a cigar. George buys 8/day, Fred, 3/day. George's consumer's surplus from cigar consumption A) might be smaller than Fred's consumer's surplus from cigar consumption. B) is larger than Fred's consumer's surplus from cigar consumption. C) equals Fred's because they both pay \$5/cigar. D) is smaller than Fred's consumer's surplus from cigar consumption. 6. Ingrid, when she is in Sweden, and not skiing for CU, consumes only pickled herring and Aquavit (a Swedish type of booze). She loves pickled herring: the more the better, but is indifferent to the amount of Aquavit she drinks. Consider her indifference curves with Aquavit on the vertical axis and herring on the horizontal axis A) Ingrid's indifference curves are upward sloping B) Ingrid's indifference curves are downward sloping C) Ingrid's indifference curves are flat (horizontal lines) D) Ingrid's indifference curves are vertical lines 7. Joe is a cocaine addict. For him, the marginal utility of consuming the first ounce of cocaine is 15 utils and the marginal utility of consuming the second ounce of cocaine is 20 utils. This behavior is possible, and contradicts the principle of diminishing marginal utility. A) True B) False
Version 1 Page 3 Use the following to answer questions 8-11: Figure: Efficiency and Pollution 8. (Figure: Efficiency and Pollution) In the absence of government intervention, the quantity of pollution will be: A) 30 tons. B) 45 tons. C) 20 tons. D) 40 tons.

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Final20102010-1_withAnswers[1] - Name Date Econ 2010 sec...

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