micro final (fall '96) - Econ 1123/010 Names l ’ Dr...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Econ 1123/010 Names l ’ Dr Holmes Final LabI tructor/Tlme Fall 1996 Short Answer/Essay Questions (15 pls each) I DISCUSS the regulatory policies for a monopolist DISCUSS the economic rationale for regulating a i . Use graphs wherever necessary onopolist .—L._ 2 Illustrating with one graph, compare morpolistic competition and perfect competition Show how monopolistic compofiti :1 leads to an “efliciency loss." Label all transfers and loss, and explain how the oficiency loss occurs J l 1 3. “Advertising for Doritos is expected to shifi {he demand curve for Coke However, advertising can change the elasticity of demzind and therefore total revenue." Use indifference curve analysis to explain the above statement. 4. Industry X is characterized by perfect oompeti on so that every firm in the industry is earring zero economic profit. If market price fell, no firms could survive. Do you agree or disagree? Discuss. 5 Using budget constraint and indifi‘erence curve analysis, derive a demand curve for orange juice when the price of orange juice doubles. 7. MULTIPLE CHOICE { r K Please place your answers in the blanks on the last page. profit-maximizing firm should not p average revenue is not at least e average revenue is not at least e marginal revenue equals marginal marginal revenue exceeds average 0.03m:- If a firm produces an insignificant p product, then all of the following at a. The firm's demand curve is virtue b. The firm is a price taker. c. The market demand curve is perfec d. The firm can sell any quantity it a. b. lower is the leVel of the margina c. higher is the level of the total d. less efficient is the technology . The demand curve is a representation roduce in the short run if qual to average variable cost. gual to average total cost. cost. total cost. likely to be true EXCEPT: Ertion of the total output of a 1y horizontal. tly elastic. can produce at the market price. . The steeper the slope of the total prbduct curve, the higher is the level of the marginal product curve. 1 product curve. cost curve. employed. of the complete functional relation between quantity demanded and a. supply. b. wealth. c. price. d. income. Short—run cost curves rise eventually because of a. the fact that all factors are var b. increasing factor prices. c. diminishing marginal product. q d. increasing marginal product. When a firm has economic profits of iable. ess than zero, all of the EFT: following statements must be true EX§ a. There is an incentive for resour b. The firm's revenue is less than fl Opportunity costs. c. The firm will eventually go out i d. The firm's books will show an ac If marginal product is Zero, then a. average product is zero. b. total product is at the maximum d c. average product is at the maximum d. total product is zero. es to move out of the industry. ull economic costs including f business. ounting profit of less than zero. r minimum. or minimum. WW...— 8. In an economic sense, the definition of the opportunity cost of 10. 11. 12. 13. something used in production is a. the benefit foregone by not using ‘it in its best alternative use. b. explicit cost, the same as the accountant's cost. the money actually paid to factors of production. long-run average costs indicate C. d. the same as the tax authority's definition. For a given range of output, decreasi a. that an unlimited amount of a 9003g will be produced. b. any scale of production is as cheap as any other. c. d. An increase in taxi fares will result the larger the scale of production, the higher the average costs. the larger the scale of production, the lower the average costs. in increased revenues for taxi drivers if the price elasticity of demand for taxi rides is a. one. b. less than one. o. greater than one. d. infinity. Assuming the demand curve does not ch supply causes all of the following EX a. a movement along the demand curve. b. a decrease in equilibrium price. c. an increase in quantity demanded. d. a decrease in quantity exchanged. nge, an increase in a product's EPT When consumer incomes increase and there is technological progress, which of the following describes the expected change in equilibrium price and quantity transacted within the market? a. The quantity exchanged increases, be determined. The quantity exchanged decreases, be determined. b. but the change in price cannot but the Change in price cannot c. The equilibrium price increases, but the change in quantity exchanged cannot be determined exchanged cannot be determined. The equilibrium price decreases, but the change in quantity Game theory proves most useful for analyzing a. perfect competition. b. monopolistic competition. c. oligopoly. d. monopoly. . That only a small number of producers defining characteristic of a. inelastic supply. monopolistic competition. cartelization. b. c. d. oligopoly. compete with each other is a 15. 16. 17. 18. 19. 20. 21. A monopolistically competitive industry has a. significant barriers to entry. g b. differentiated products. c. mutually dependent firms. d. a small number of large firms. I l l i A firm in monopolistic competition mu t have some degree of price-setting power because a. it earns, at best, normal economi profit. b. it can never earn less than norma economic profit. c. the price it charges is never more than marginal cost. d. it must lower its price in order to sell a greater quantity. When economic profit is positive in an industry that is monopolistically competitive, firms w 11 a. enter the industry, and demand Hi 1 increase for the original firms. b. exit the industry, and demand will increase for the firms that remain. c. exit the industry, and demand will decrease for the firms that remain. d. enter the industry, and demand will decrease for the original firms. In monopolistic competition, in the lfing run firms produce a. a lower output than that which mi imizes ATC. b. a higher output than that which m‘nimizes ATC. c. an output that minimizes ATC and VC. d. an output that minimizes ATC but not AVC. An unregulated monopolist will lower price when a. fixed costs fall b. marginal costs fall. c. market demand increases. d. demand becomes less elastic. Compared to a competitive industry, a’monopoly transfers a. deadweight loss to consumers. b. deadweight loss to producers. c. producer‘surplus to consumers. d. consumer surplus to producers. Utility is best defined as a. the value of a good. b. the additional satisfaction receiyed from consuming another unit of a good. c. the benefit or satisfaction from consuming goods and services. d. the practical usefulness of a goqd. 22. If demand is price elastic, i f i I a. a given percentage decrease in th price causes a larger percentage increase in the quanti y demanded. b. a given percentage increase in th price causes a larger percentage increase in the quanti y demanded. c. a given percentage decrease in th price causes a smaller percentage decrease in the quanti y demanded. d. the price is very sensitive to an? shift of the supply curve. 23. According to the kinked demand curve heory of oligopoly, each firm thinks that the demand curve just bel w the existing price is a. flatter, or less elastic, than th curve just above the existing price. b. flatter, or more elastic, than thl curve just above the existing price. c. steeper, or less elastic, than the curve just above the ex1sting price. d. steeper, or more elastic, than th price. 24.‘In the dominant firm model of oligopo the quantity at which its marginal re a. the price of the product. b. its marginal cost. c. its average cost. d. zero. 1 e curve just above the existing enue equals #y, the dominant firm produces < 1 25. On a diagram showing indifference curves, the marginal rate of substitution is represented by the magnitude of a. a point on the horizontal axis. b. a point on the vertical axis. c. a slope. d. an area. Answers to multiple choice questions: 1____ 2_____ 3.__ 6_____ 7_____ 3_______ I!“ 12__ 12 16 17 18 21 22 23. 4 H,“ 5 __ 9 __ 10 _____ 14 __ 15 ____ 19 __ 20 __ 24. 25 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern