finalFall2008Econ214

# finalFall2008Econ214 - Econ214 Managerial Microeconomics...

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1 Econ214 Managerial Microeconomics Fall, 2008 Final Exam Instructor: Yan YU HKUST Name: _______________ ID number:_______________ Total Score: _________________ General Instruction: This is a closed-book examination. You have 180 minutes. Please check first if you have a total of 7 pages including this cover page. You may use calculators.

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2 I. Multiple Choice; (only one correct answer for each question. 6 points each, 24 points total) 1. Two identical firms compete as a Cournot duopoly. The demand they face is P=100- 2(Q 1 +Q 2 ). Each firm has a constant marginal cost of \$4. In equilibrium, the deadweight loss is: a). \$128. b). \$256. c). \$384. d). \$512. 2. P&G is promoting a new facial mask. At its current price of \$120 per box, it sells 1.2 million boxes a year. The marginal cost of production is \$50. The advertising elasticity is estimated to be 0.05. What is the optimal amount of advertising expenditure based on the above data? a) 4.2 million dollar b) 84 million dollar c) 3 million dollar d) 7.2 million dollar e) Less than 3 million dollar 3. You are going to reopen the Pizza Bird on campus. Based on your past experience,
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## This note was uploaded on 12/21/2011 for the course ECON 214 taught by Professor Bayemichael during the Spring '09 term at HKU.

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finalFall2008Econ214 - Econ214 Managerial Microeconomics...

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