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Econ_198_Spr_07_Exam__2

Econ_198_Spr_07_Exam__2 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2007 SECOND HOUR EXAMINATION Name (Please Print): ______________________________________ [41 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 21 points total. 1. Most supply curves have positive slopes because: a. if consumers are willing to pay higher prices for some goods, firms are more than happy to charge them more. b. most businesses are either monopolies or oligopolies. . c. marginal costs tend to increase as output increases. d. firms need to make a profit to stay in business. e. of diseconomies of scope. 2. Oligopolies are difficult to analyze because: a. firms in an oligopolistic market are so large and complicated. b. of the uncertainty surrounding how firms will respond to price or quantity changes by rivals. c. there is so much price discrimination, predatory pricing and other anti-competitive practices going on all the time. d. the principles, structure and logic of game theory don’t apply very well to oligopoly markets. e. revenue and cost curves simply don’t exist for these types of industries. 3. Consumers benefit from monopolistic competition by: 4. I would expect the price elasticity of demand for a monopoly producer of a good with virtually no substitutes to be approximately: 5. Successful price discrimination requires or will result in all of the following except :
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