Ex3AS09 for Old Exam File

Ex3AS09 for Old - ECONOMICS 202 EXAM 3A SPRING 2009 ANSWER THE NEXT 3 QUESTIONS WITH REFERENCE TO THE ADJACENT DIAGRAM OF A SINGLE-PRICE

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ECONOMICS 202 – EXAM 3A – SPRING 2009 ANSWER THE NEXT 3 QUESTIONS WITH REFERENCE TO THE ADJACENT DIAGRAM OF A SINGLE-PRICE, PROFIT-MAXIMIZING MONOPOLIST. 1. This firm will set price = : a. T; b. V; c. X; d. Y; e. Z 2. What price would maximize TMS and make DWL = 0? a. T; b. V; c. W; d. X; e. Z 3. If this firm increases the price from V to W: a. TR will rise; b. TC will fall; c. economic profits will rise; d. all above e. only b and c, not enough information to know how TR will change if at all. 4. If a firm has monopoly power, a. its demand function is negatively sloping b. it can raise its price without fear of its sales falling to zero c. it can set its price above marginal cost and still maximize its profits d. all above e. only a and b. 5. If a firm has any monopoly power, except for the first unit, price is always greater than marginal revenue. 6. Economies of scale and a patent are examples of: a. barriers to entry; b. mutual interdependence; c. product differentiation; d. reasons for a kinked demand curve; e. all above. ANSWER THE NEXT QUESTION BY IDENTIFYING THE APPROPRIATE SET FROM THESE THREE OPTIONS: 1. Economic Profits < 0; 2. Economic Profits > 0; 3. Economic Profits = 0 7. In the short-run in monopoly ____ is (are) possible; and in the long-run in monopoly ____ is (are) possible (a) 2,3; 2,3 (b) 1,2,3; 1,2,3 (c) 1,3; 2,3 (d) 1,2,3; 2,3; (e) 1,2,3; 2 8. The “Classic Case Against Monopoly” concludes that as compared to perfect competition monopoly charges a higher price and produces a larger quantity 9. The “Alternate View of Monopoly” demonstrates that monopoly could actually enlarge TMS beyond that realized in perfect competition if the monopolist: a. successfully differentiates its product;
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This note was uploaded on 02/13/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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Ex3AS09 for Old - ECONOMICS 202 EXAM 3A SPRING 2009 ANSWER THE NEXT 3 QUESTIONS WITH REFERENCE TO THE ADJACENT DIAGRAM OF A SINGLE-PRICE

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