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11-26-2011, 05:59 PM
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Eco402 solved paper for u :)
Q:Eliminating price supports for all US agricultural producers will hurt the farmers who cultivate products that have:
A high own price elasticity of demand and a high price elasticity of market supply. A high own price elasticity of demand and a low price elasticity of market supply. A low own price elasticity of demand and a high price elasticity of market supply.(nt sure) A low own price elasticity of demand and a low price elasticity of market supply. Q:Suppose a monopolist increases production from 10 units to 11 units.if the market price declines from $20 to $ 19 per unit,marginal revenue for the eleventh unit is: $1 $9 $19 $20 Q:When people pay a monthly fee to have a hookup to the telephone company’s line plus a fee for each call actually made,we would say that the telephone company is using: Limit pricing A two-part tariff Two stage price discrimination Second degree price discrimination Q:A price starategy that requires consumers pay an up-front fee plus an additional fee for each unit of product purchased is a: Tying contract Two-part tariff Form of perfect price discrimination None of the given options Q:which of the following is true of the output level produces a firm in long run equilibrium in a monopolistically competitive industry? It produces at average cost It does not produce at minimum average cost,and average cost is increasing It does not produce at minimum average cost,average cost is decreasing None of the given Q:A market structure in which there is one large firm that has a major share of the market and many smaller firms supplying the remainder of the maket is called: The stackelberg model The dominant firm model The cournot model The Bertrand model Q:If an individual’s labor supply curve is backward bending,then: The income effect associated with a higher wage is greater than the substitution effect The substituition effect associated with a higher wage is greater than the income effect The substituition effect associated with a higher wage encourages more leisure None Q:when the factor market is purely competitive,the firm’s average expenditure curve for a factor or production is: Upward sloping and to the right of marginal expenditure curve Downward sloping and to the right of the marginal expenditure curve Identical to the marginal expenditure curve Downward sloping and to the left of the marginal expenditure curve Q:A firm purchases a factor of production in acompetitive market.at the current purchase rate the MRP of the factor is greater than the marginal expenditure for the factor.Thus,the firm: Can increase profit by reducing the employmet of the factor of production Is now maximizing profit Should not use this factor of production because it has no potential in generating a profit Can increase profit by expanding the employment of the factor of production. Q:A local restaurant offers an’all-you-can-eat’salad bar for $3.49.however,with any sandwich a customer can add the’all-you-can-eat’ salad bar for $1.49.this is an example of: Peak-load pricing Second-degree price discrimination A two part tariff None Q:the industry demand curve for labor is the: Horizontol sum of individual firm labor(think so) Vertical sum of individual firm demand curves Representative firm’s demand curve multiplied by the number of firms None Q:the market structure in which strategic considerations are most important is: Monopolistic competition Oligopoly Pure competition Pure monopoly Q:which of the following can be thought of as barrier to entry? Scale economics Patents Strategic actions by incumbent firms All Q:In stackelberg model,there is an advantage: To wait until your competitor herself to a particular output level before deciding on your output level To being the first competitor to commit to an output level To the firm with a dominant strategy To produce an output level which is identical to a monopolist’s output level. Q:whch oligopoly model have the same results as the competitive model? Cornot Bertrand Stackelberg Both cournot and stackelberg Q:scarcity can be avoided by amking: Needs unlimited Wants unlimited Resources limites Wants and need limited Q:land is best described as: Produced factors of production “organizational”resources Physical and mental abilities of people “naturally”occurring resources Q:the constant dollar price is: The real price The nominal price of a good adjusted for inflation The current dollar price adjusted for inflation All Q:The slope of the total product curve is the: Average product Marginal product Marginal rate of technical substituition None Q:in the long-run which of the following is considered as a variable cost? Expenditures for wages Expenditures for raw material Expenditures for capital machinery and equipment All Q:when a product transformation curve is bowed outward,there are: Economies of scale Economies of scope Diseconomies of scope Diseconomies of scale Q:competitive firm will operate at …….in the long run Its efficient scale Minimum marginal cost TR>TC Maximum MR Q:in a ………..industry an increase in demand will be followed by an increase in supply that will bring price down to the level it was before the demand shift. Constant cost industry Increasing cost industry Decreasing cost industry None Q:marginal revenue for a monopolist is: Less than price Equal to average revenue More than average revenue Less than average revenue Q:if market supply is elastic monosony will be…..and if the market supply is inelastic than monosony power will be……. High,high High,low Low,high Low,low Q:ability to split consumers into different groups is the necessary condition of: Price discrimination Two part tariff Bundling All Q:A monopoly can be temporary because of: High barriers to entry Priviliges granted by the government Economies of scale Economic profits,which attract rivals. Q:lerner index for monopoly power can be written as: L=(P-MC)/P L=P-MC LP-MC)P L=P/MC Q:in third degree price discrimination we give the discounts to the students not all the consumer because of: Less affordability and more elasticity of demand Less affordability and less elasticity of demand More affordability and more elasticity of supply More affordability and less elasticity of demand Q:we make groups of consumers in …….price discrimination and….price discrimination. First degree,second degree(nt sure) Second degree,intertemporal Third degree,interemporal Second degree,third degree Q:in two part tariff when there is only a single consumer,the shape of MCis: Horizontal to x-axis Vertical to Y-axis Upward sloping Downward sloping Q:in the long-run …..both for perfectly competitive firm and monopolistically competitive firm. P=MC MC=ATC P>MR Economic profit equals zero Q:a firm is in equilibrium when the marginal factor cost is Less than the price of factor Greater than the average product Equal to the average product Equal to the marginal revenue product Q:if there are only two goods X and Y which are consumed by the individual which of the following expressions represents the utility maximizing market basket? MRSxy is at maximum Px/Py+money income MRsxy + money income MRSxy +Px/Py Q:A line that shows all combinations of two goods a consumer can buy is called a ……in indifference curve analysis Indifference curve Utility line Budget line Income possibility line Q:what does the positive slope of Engel curve show? It shows that both goods are normal It shows that the good on the horizontal axis is normal It shows as the price of the good on the horizontal axis increases,more of both goods is consumed It shows as the price of the good on the vertical axis is increases,more of the good on the horizontal axis is consumed. Q: what will be the effect on consumer expenditures for the purchases of price inelastic good? Increase when price increases Decrease when price increases Do not change when price increases Are not related to price elasticity of demand Q:the total cost of producing compact dis (Q) is given as :TC=+%Q what is fixed cost? 400 5Q 5+(400/Q) None Q:why there is no supply curve under the condition of monopoly?(3 marks) Q:How can a firm check that its advertising-to-sales ratio is not too high or too low?what information does it need?(3 marks) Q:which model is used to illustrate price competition in an oligopolistic industry?write down the basic assumptions of this model?(3 marks) Q:suppose an automobile company produces cars and tractors jointly.what are the benefits for the company to produce both things jointly?(3 marks) Q:differentiate between competitive and non-competitive markets with the help of suitable examples?(5 marks) Q:suppose a firm can practice perfect first degree discrimination what is the lowest price it will charge and what will be its total output?(5 marks) Q:If in a monopolistically competitive market, P=20-Q,Q=4 and AC is $8 than find out the prift?(5 marks) Q:Explain the relationship between the supply of an input and the marginal expenditure on it,in case of monopsonist?(5 marks) 
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Linear Mode
