ECONOMICS I: Mid-Term Exam
Notes: 1)You may use your text book and/or class notes.
2)You may not discuss this exam with anyone either face to face or via email.
3) The Maximum Raw Score Points Available on this exam = 46. Each portion of
FINAL EXAM ANSWERS Max raw score: 42 pts.
Professor M. Carter
1)Budweiser, Miller and Coors who together produce 80% of all beer consumed in the US, each
spend well over $500 million a year on television advertising campaigns, promoting their beer
Review questions on Monopolistic Competition & on Price Discrimination
1)Agree or disagree and explain your answer. The typical firm in a monopolistic
competitive market earns above normal profits because it sells a differentiated product
and only produce
Answers to review questions:
1)Jane operates a business driving an ice cream truck leased from the Ding Dong Ice Cream Company.
Her annual expenses and revenues are as follows.
$60,000 ice cream sales
$5000 annual franchise
1)What condition of competitive equilibrium in markets implies that resources are being devoted to their
highest valued uses?
When firms in competitive markets maximize profits by expanding Q until MC= P, they are devoting
resources to their highest value
Review Questions: Week 8
1) Read the WSJ article on the attempted monopolization of the plastic clothes hanger
market in this week's notes. Why does monopolization have the potential to increase
prices and profitability significantly in the short run? Do
Review questions on Oligopoly Markets
1)Where formal cartels are illegal, what techniques can firms use to attempt to prevent
price wars from breaking out and to maintain a price level in the market which
approximates the level that a monopolist would cha
Week 1B: Answers to review questions: (Graphs at bottom of file)
1)Shift the Demand schedule to the left, (or down) which leads to a decline in the equilibrium monthly
Reason: higher tuition and fees at UMASS Lowell lead to a reduction in the
Answers to week 3 review questions:
1) Suppose that the U. S. were involved in a trade dispute with the European Economic
Community over tariffs which they had imposed on our goods. If we wished to impose a
retaliatory tariff on their goods, would it be m
Microeconomics: Week 1 Review Questions
1) Suppose that the wages of young high school graduates fell. In what sense has the true cost
of a college education been changed by this development.
Other things equal, if wages of young high school graduates dec
Answers to lesson 2B Review Questions:
1. "Karen is considering purchasing a pair of shoes that cost $120 or a skirt that
costs $80. If she ends up purchasing the skirt, then we can infer that the marginal
utility of that additional skirt was greater for