test3fall2005 - Dr. Cliff Lipscomb ECON 2106, Fall 2005...

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Dr. Cliff Lipscomb ECON 2106, Fall 2005 Test 3 1. An example of a monopolistically competitive industry is a. airlines b. toothbrushes c. oranges d. apples 2. Market equilibrium is efficient: a. When the external benefits are greater than the external costs. b. When there are external benefits but no external costs. c. Even in the presence of external costs. d. When there are neither external benefits nor external costs. 3. An example of a public good with nonrivalry and nonexcludability is: a. a writing pen b. national defense c. a class ring d. a personal computer 4. Which of the following is a characteristic of a perfectly competitive industry? a. a small number of buyers and sellers b. recognized mutual interdependence c. price making d. price taking 5. Which of the following is a characteristic of a monopoly? a. price taker b. a large number of producers c. product differentiation d. price maker Refer to the graph below for questions 6 and 7.
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Dr. Cliff Lipscomb ECON 2106, Fall 2005 Test 3 6. How much is the total consumer surplus in this market when equilibrium is represented by the intersection of D and S 1 ? a. $10 b. $40 c. $30 d. Not enough information is given in the graph. 7. What area on the graph represents the total consumer surplus when equilibrium is represented by the intersection of D and S 2 ? a. A + B + C b. A c. D + E + F d. B + C 8. Refer to the graph below. Who earns the greatest amount of consumer surplus in this graph? What is that amount? a. Juan; 12 b. Juan; 15 c. Tupak; 9 d. Tupak; 38 9. Refer to the graph below. In a perfectly competitive market, the triangle des is called: a. A rent control. b. A maximum price area. c. A deadweight loss.
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Dr. Cliff Lipscomb ECON 2106, Fall 2005 Test 3 10. In a monopoly, marginal revenue is a. equal to price b. always above price c. always below price d. first above price, then below price once the elasticity of demand becomes inelastic 11. Price discrimination is a. illegal b. not a profit maximizing behavior c. selling the same product to different segments of the market at different prices d. not possible in the United States due to low barriers to entry 12. Which of the following will lead to a decrease in profit for the individual firm after entry of a second firm? a. higher market price
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This note was uploaded on 11/16/2011 for the course ECON 2106 taught by Professor Staff during the Fall '08 term at Valdosta State University .

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test3fall2005 - Dr. Cliff Lipscomb ECON 2106, Fall 2005...

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