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# Question 4 A monopolist estimates that at the current price being charged for the product, marginal revenue is less than marginal cost, and price...

I am not sure wiz these MCQ's answers cause I can't find the answer on the website therefore I can't check my answer. I have put my answer on the picture.

2.In Q4, why the answer is not C?

I am confused with Q10, Q12 and Q15. The answer for 10, 12 and 15 are C, A/C and A respectively.

For Q10, I think MR=MC and 5X( X is the number of quantity picked)=110, but there is no answer for this result.

For 12, I chose B and for 15 I had no idea.

Question 4
A monopolist estimates that at the current price being charged for the product, marginal revenue is less than marginal cost, and price elasticity of demand is —1.4. To increase proﬁt
the monopolist should: (a) Increase price and sell less (b) Increase price and sell more (c) Decrease price and sell less (d) Decrease price and sell more X Quali— 9
The table below presents data on the productivity of fruit pickers working on a fruit farm The fruit farming industry can be assumed to be competitive.
Number of workers Quantity of fruit picked per day (kg)
1 20
50
90
l20
I45
I65
180
I90 eeqauAuu The market price of fruit is \$5 per kilo. Fruit pickers here are not paid by results. They receive a ﬁxed wage of S] 10 per day
The Marginal Revenue Product from employing the 7“ worker is: (a) \$15 (b) 15 kg (c) S75 (d) SI 00 Question to Consider the data for Question 9 To maximise proﬁt the factory should employ:
(a) 3 workers 0)) 4 workers (e) 5 workers (d) 6 workers If the supply curve of a factor of production facing a competitive ﬁrm is perfectly
inelastic, then from the ﬁrm’s point of view: (a) none of the factor’s earnings is necessary transfer payment (b) all of the factor’s earnings is producer surplus (c) none of the factor’s earnings is rent (d) all of the factor’s earnings is rent Question 15 Oligopolists are more likely to engage in successful collusion to maximise industry
proﬁts when (a) the barriers to the entry of new firms into the industry are high
(b) The degree of product differentiation between each ﬁrms’ product is high
(c)'l'he number of member firms in the industry is high (d) total demand for the industry’s product is declining rather than growing

Practice Final Exam 1
For a given question to be considered an economic question, it would need to involve:
explicit prices.
Op
making a choice.
a graph.
limited resources.
limited resources and making a choice.
e
2
The use of economic models, like the cost-benefit principle, means economists believe that:
this is how people explicitly choose between alternatives.
this is a reasonable abstraction of how people choose between alternatives.
a
those who explicitly make decisions this way are smarter.
with enough education, all people will start to explicitly make decisions this way
this is the way the world ought to explicitly make decisions.
The distinguishing feature of microeconomics is studying:
choices.
the performance of national economics.
b
the overall price level.
choices made by individuals or groups in the context of individual markets.
how to improve the performance of national economics.
4
Joe has decided to purchase his textbooks for the semester. His options are to purchase the
books via the Internet with next day delivery to his home at a cost of \$250, or to drive to
campus tomorrow to buy the books at the university bookstore at a cost of \$245. Last week
he drove to campus to buy a concert ticket because they offered 20 percent off the regular
price of \$20.
a.
It would not be rational for Joe to drive to campus to purchase the books because the
\$5 saving is only two percent of the cost of books, and that is much less than
the
20 percent he saved on the concert ticket.
b.
It would be rational for Joe to drive to campus because it costs less to buy the
books there than via the internet.
It would be rational for Joe to drive to campus because the \$5 saving is more than he
saved by driving there to buy the concert ticket.
It would not be rational for Joe to drive to campus to purchase the books because the
cost of gas and his time must certainly be more than the \$5 he would save.
e
e.
There is insufficient information to determine whether it would be rational or not for
Joe to purchase the books via the Internet or on campus.
C
The Smithville Elementary School Teachers Association petitions the Smithville School
b
Board to provide a computer lab for their school. To support their argument the Association
presents data from national studies that show when students are provided with computer
training they earn an average of \$5,000 of additional income during their lives. In order for
the School Board to make a rational choice, it should:
determine if other elementary schools have computer labs.
build the computer lab because the children will be able to earn a higher income
during their lives.
not build the computer lab because the study was not based on a study of the
Smithville area.
build the computer lab if the additional cost per student is less than or equal to the
build the computer lab if the additional cost per student is greater than or equal to the
6.
Meredith had only \$16 to spend this last weekend. Initially, she was uncertain about whether
to go to two movies she had been wanting to see or to buy a new CD she had recently heard.
O
In the end she went to the movies. Which of the following statements is correct?
The choice of the two movies and not the CD is an example of increasing costs.
The opportunity cost of the two movies is one CD.
The opportunity cost of the two movies is \$16.
None of the above.
Practice Final Exam 1
REFER TO THE DIAGRAM BELOW WHEN ANSWERING THE NEXT 4 QUESTIONS. The graph is
Mendork's production possibility curve for the only two goods that it produces - quirks and quarks.
Quarrtity of Guirk
Refer to the above diagram. What is the opportunity cost of producing the first 600 quarks?
C
it is 4 quirks
it is 8 quirks
it is 10 quirks
the answer cannot be determined from the information above
8.
Refer to the above diagram. If Mendork's production is currently that indicated by point A.
what is the (approximate) cost of producing one or more quirk(s)?
100 quarks
50 quarks
b
d.
25 quarks
200 quarks
one more quark
9.
Refer to the above diagram. If new technology increased the output of quirks by 50%, how
many quirks could be produced if 600 quarks were produced?
C
18 quirks
20 quirks
15 quirks
10 quirks
no quirks
10.
Refer to the above diagram. Which of the following statements is correct if Mendork is
currently producing 500 quarks and 8 quirks?
This society is using competition to coordinate its economic activities.
This society is experiencing either unemployment or inefficiency
This economy is experiencing full time employment.
This economy is growing quickly.

ll. 12. [3. 14. 15. 16. Practice Final Exam 1 All of the following statements, except one, are nonnative statements. Which is the exception? a. The taxes on gasoline should be lower. it. Lowering the taxes on gasoline would decrease the price at the pump. c. It is wrong for the government to tax gasoline. d. The government is trying to mislead people about the tax on gasoline. 1 1 d
A production possibiiitics curve is bowed out because: 1 2 d
a. society has ﬁxed amounts of productive resources. 1 3 a
b. the curve is negatively sloped. c. resources are not perfectly adaptable to different uses. d. it becomes less and less costly to produce each additional unit of output. which or the following is an example of a marginal question? a. How much will my chances of a job improve if I raise my GPA from a C to a (2+?
b. What is the average cost of a college education? 0. How many students borrow money in order to attend college? d. What is the average income of a college graduateil Sets-ct the best statement about economic models. a. An economic model is evaluated based on the realism of its assumptions. b. An economic model should not generate predictions about actual events in the real
world, since it discusses onlyr abstract events. c. An economic model will be discarded if its predictions are often in conflict with the
facts. d. Economic models are all false. Anytime one purchases a ticket in advance of an event. if the ticket is non-refundable and non-transferable then on the day ofthe event: 1 4 a
a. the ticket is part of the cost of going. b. the ticket is a variable cost. 1 5 d
c. the ticket is part of the cost of going if it was expensive. d. the ticket is a sunk cost and should pay no role in the decision to go or not. 1 6 a
c. the ticket is a titted cost but not a sunk cost. Specialization of labor not only results in the abilin to produce a larger amount of goods due
to innate differences in people’s skills, but also by: rigidly segmenting work. switching back and forth among numerous tasks.
deepening 9-937.” Practice Final Exam 1 REFER TO THE FOLLOWING TABLE WHEN ANSWERING THE NEXT4 QUESTIONS. 1?. 19. Shoes Per Hour Pants Per Hour Refer to In: above Iabfe. Craig possesses an absolute advantage in: a. the production of shoes. I). neither shoe nor pant production. 1 7 d
c. the production of pants. d. both shoe and pants production. 1 8 b
e. pants and possiny shoe production Refer to the above table. Jenny‘s opportunity cost of producing an extra pair of pants is: 1 pair of shoes.
1.5 pairs of shoes.
2 pairs of shoes.
2.5 pairs of shoes.
3 pairs of shoes. PEI-99'!” Refer to the above table. Craig‘s opportunity cost of producing an extra pair of shoes is: .75 pairs of pants.
.90 pairs of pants,
1 pair of pants.
[.25 pairs of pants
1.33 pairs of pants. 99-937!” Refer to the above table. Based on their comparative advantages. Craig should specialize in
producing while Jenny should specialize in producing . midi? 19 a a.
b.
3: 3:32:32? 20 d
e. pants; pants

ANSWER THE NEXT 2 QUESTIONS BASED ON THE DIAGRAM BELOW:
21.
Refer to the above diagram, illustrating the demand for guitars. An increase in price of
guitars would bring about a movement from:
Point B to Point C.
Point B to Point A.
b
Point Di to Point Do
Point Di to Point D2
22.
Refer to the above diagram, illustrating the demand for guitars. A successful advertising
campaign to sell guitars would bring about a movement from:
Point B to Point C
Point B to Point A.
Point Di to Point Do
Point D, to Point D2.
REFER TO THE FOLLOWING DIAGRAM WHEN ANSWERING THE NEXT 2 QUESTIONS
Price
Quantity of Guitar
23.
Refer to the above diagram, illustrating the supply of guitars. An increase in the price of
rosewood, which is used to make guitars, would most likely cause a movement from:
Point B to Point C
Point B to Point A.
Point S: to Point So.
Point S1 to Point S2.
d
24
Refer to the above diagram, illustrating the supply of guitars. A decrease in the quantity
supplied of guitars is represented by a movement from:
Point B to Point C.
oint B to Point A.
24 b
Point S, to Point So
Point S1 to Point S2.
25 b
25
Suppose that in October the price of a cup of cafe latte was \$1.50 and 400 lattes were
consumed. In November the price of a latte was \$2.00 and 600 lattes were consumed. What
might have caused this change?
The price of tea (a substitute for cafe lattes) fell.
The price of tea (a substitute for cafe lattes) rose.
The price of coffee beans (an input of production of cafe lattes) rose.
The price of coffee beans (an input of production of cafe lattes) fell.
26.
Suppose that the price of fertilizer, an input in the production of corn, falls. We would predict
that the equilibrium quantity of corn will
_and the equilibrium price of corn will
rise; rise
rise; fall
26 b
fall; rise
fall; fall
27 d
REFER TO THE FOLLOWING TABLE WHEN ANSWERING THE NEXT 2 QUESTIONS. The table
represents the market for mushrooms. Quantities are in thousands of kilos per month
Price (\$)
2.50
3.00
3.50
4.00
4.50
5.00
5.50 6.00
Quantity
Demanded
64
62
60
58
56
54
52
50
Quantity
Supplied
40
44
48
52
56
60
64
68
27.
Refer to the above table. What are the values of equilibrium price and quantity traded?
\$3 and 52
\$3 and 62
ASS
\$4 and 58
\$4.50 and 56
cannot be determined
28.
Refer to the above table. What will happen if the price is \$3?
1 87
A surplus of 18 which would lead to a decrease in price.
A shortage of 18 which would lead to an increase in price.
A shortage of 18 which would lead to a decrease in price
29 d
A surplus of 18 which would lead to an increase in price.
Supply exceeds demand.
29.
Bananas and apples are substitutes. In the market for apples, when the price of bananas falls,
and technological advance in apple production occurs at the same time:
the equilibrium price of apples rises and the equilibrium quantity of apples falls.
the equilibrium price of apples rises and the equilibrium quantity of apples rises.
the equilibrium price of apples rises and the equilibrium quantity of apples might rise
or fall.
the equilibrium price of apples falls and the equilibrium quantity of apples might rise
or fall.
30.
workplace have served to increase productivity.&quot; Assuming the statement is true, one would
expect this to cause:
an increase in supply.
an increase in quantity supplied.
30 a
a decrease in supply.
decrease in quantity supplied.
31 d
no change in the marketplace.
When a market is not in equilibrium:
government intervention is required to achieve equilibrium.
consumers will organize into special interest groups to promote their agenda.
firms will increase contributions to political action committees.
the economic motives of sellers and buyers will move the market to its
equilibrium.
e.
it will simply stay in a state of disequilibrium.

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