1. In a perfectly competitive firm and a perfectly price discriminating monopolistic face the same demand and cost curves, then a.the competitive firm will attain resource-allocative efficiency but the monopolist will not b.the competitive firm will attain resource allocative efficiency but the monopolist may or may not depending upon the demand for its product c.the competitive firm will not attain resource allocative efficiency but the monopolist will d.noth the competitive firm and the monopolist will attain resource allocative efficiency e.neither the competitive firm, not the monopolist will attain resource allocative efficiency

2. In general electric, gas, and water companies are examples of ____ monopolies a.unregulated b.patent c.natural d.government

3. At the quantity where a single price monopolist maximizes profit, price will be a.equal to marginal-cost b.equal to marginal revenue c.greater than marginal cost d.less than marginal cost e.less than marginal revenue

4. Which of the following is true of price and marginal revenue for the first unit of output sold by a monopolist? A.price is greater than marginal revenue b.price is less than marginal revenue c.price is equal to marginal revenue d.a or b depending on whether it is a single price or a price discriminating monopolist

5. A single price monopolist a.must lower price on all previous units to sell an additional unit of output b.is a price taker c.finds that its marginal revenue and price are the same for the first unit of the good it sells d.necessarilt faces a perfectly inelastic demand curve e.a and c

6. One thing a monopoly firm has to do that a perfectly competitive firm does not have to do is a.search for its profit-maximizing price b.advertise c.minimize its losses d.produce the quantity of output at which P=MC e. Produce a high-quality product

7. Which of the following statements is true a.the motivation for the rent-seeking is not the same as the motivation for profit-seeking b.economic rent is a payment in excess of opportunity cost c.the deadweight loss triangle is not considered the graphic representation of one of the costs of monopoly, instead, it is one of the costs of not having a monopoly d.rent seeking is almost always an irrational activity as far as the rent-seekers are concerned e.a and d

8. The ______ Acts, passed by the British Parliament in the 1760s imposed taxes on a variety of products imported into the American colonies. a.smooth Hawley tariff b.tea c.townsend d.british east India

9. In a monopolistic competitive market which of the following factors probably does not give rise to product differentiation? A.packing of the product b.brand names c.loyalty of customers to a particular producer d.quality difference e.the small number of sellers

10. Which of the following industries is the best real-world example of monopolistic competition? A.soft drinks b.electricity generation c.automobiles d.computer software

11. The monopolistic competitive firm faces a ____ demand curve. A.horizontal b.vertical c.downward sloping d.upward sloping

Exercise 14-12 (LO14-7)

A real estate developer wishes to study the relationship between the size of home a client will purchase (in square feet) and other variables. Possible independent variables include the family income, family size, whether there is a senior adult parent living with the family (1 for yes, 0 for no), and the total years of education beyond high school for the husband and wife. The sample information is reported below.

1. Develop an appropriate multiple regression equation using stepwise regression. (Use Excel data analysis and enter number of family members first, then their income and delete any insignificant variables. Leave no cells blank - be certain to enter "0" wherever required. R and R2 adj are in percent values. Round your answers to 3 decimal places.)

1. Develop an appropriate multiple regression equation using stepwise regression. (Use Excel data analysis and enter number of family members first, then their income and delete any insignificant variables. Leave no cells blank - be certain to enter "0" wherever required. R and R2 adj are in percent values. Round your answers to 3 decimal places.)

2. Select all independent variables that should be in the final model. (You may select more than one answer. Single-click the box with the question mark to produce a check mark for a correct answer and double-click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• Senior parent
• Square feet
• Family size
• Income
• Education

Think of the U.S. as the domestic country and Great Britain (GB) as the foreign country. Let “e” stand for the domestic price of one unit of the foreign currency. If e = 1.80, then Group of answer choices none of the other options. $1 would cost approximately £1.80. a guitar in GB listed at £1,800 would cost $1,000. a guitar in the US listed at $2,160 would cost £1,800. $1 would cost approximately £0.56.

Suppose Thailand has seen a downturn in their economy, and US investors (and other countries) start pulling out their investments from Thailand’s financial markets. Suppose this cause a decrease in the dollar price of the Thai currency (the Baht). This could be called a ‘depreciation of the Baht against the dollar. Then, an analyst says that “…because the price of the Baht has fallen, this will cause people to buy more of the Baht, and that will cause the price of the Baht to increase again back toward where it was before the economic downturn.” (It may help you to use our model of exchange rate determination, and substitute the Baht () in place of the Pound (£). Let ‘e’ be the $ price of 1 – currently about $0.03!) .  incorrect because it will increase above where it was before the economic downturn.

correct because there would be a shortage of the Baht in the currency market if this did not happen.

correct because people buying more always causes price to increase.

correct because there would be a surplus of the Baht in the currency market if this did not happen.

incorrect because buyers of the Baht caused the price drop in the first place, and the drop in price will not shift demand for the Baht to the right.

4. Al and bert each own gidgets producing firms, in a duopoly market. The gidgets produced by Al and Bert are identical and both the firms have identical costs.

These are the demand and cost conditions

Demand: P=248-4Qt=248-4QA-4Qb

Cost: ATCA=ATCB=MCa=MCb=$8

a. assume first that al and bert come to an agreement and collude to form a profit maximizing cartel. the firms split the output and profits equally. Find cartel output, and profits.

Cartel output=_____ Price=_____ Firm output=_____ Firm profits=______

b. Now assume the cartel splits up and al and bert start a price war. Now find price, output and profits

Price=_____ Total output=_____ Firm output=_____ Firm profits=_____

c. Al and bert come to their senses somewhat and decide to conduct their competition over quantity instead. (Cournot) Find price. output and profits.

Price=_____ Total output=_____ Firm output=_____ Firm profits=_____

d. compare the profits that they earn when they compete as Cournot rivals in part c, with their profits if they cooperate (part a). of course they are better off cooperating. But the problem is both firms have an incentive to cheat (renege) on the deal. Use the reaction functions you constructed for part c to find the profit maximizing output for one of the firms (the cheater) is the other (the victim) sticks with the agreed output and then find the price and respective profits.

Cheaters output=_____ total output=_____ price=____ cheaters profits=_____ victims profit=_____

e. now use the information to create a payoff table.

Suppose a public referendum is being held on whether or not to levy a tax on cigarettes. Currently, the supply of cigarettes is given by Qs = -40 + 6P. You estimate the demand for cigarettes to be Qd = 140 - 3P.

You are asked to evaluate the likely effects of a tax on cigarettes equal to $1.50 per pack of cigarettes. Specifically, you are to file a report which predicts by how much this will reduce the amount of cigarettes sold. You are also asked to estimate the proportion of the tax that will be paid by the cigarette companies (sellers), and the proportion of the tax that will be paid by the smokers (consumers) of cigarettes.

To do this, you will first need to calculate the current price and quantity of cigarettes sold.

a) (4 points) What is the equilibrium price and quantity of cigarettes?

P* = __________________________

Q* = __________________________

Next you know from your economics class that you will need to know the price elasticity of demand and the price elasticity of supply of cigarettes

b) (2 points) What is the price elasticity of demand for cigarettes at the equilibrium price?

ε = ________________________

c)  η = ________________________

Using your answers to b) and c), you are now able to determine what proportion of the tax will be paid by buyers, and what proportion of the tax will be paid by sellers.

d) What proportion of the tax will be paid by sellers?

Seller’s Proportion = ___________________________________

e) (3 points) What price will buyers pay after the tax is imposed?

Buyer’s Price = ___________________________________

f) (4 points) What quantity of cigarettes will be sold after the tax?

Q^t = ____________________________________

g) (4 points) What is the deadweight loss from the tax?

DWL = ___________________________________

6. John has a car he wants to sell. His goal is to get as much as he can for the car (profit-maximizer). He lists the car in the local paper with no price – just “highest bidder” and announces a time to come by if interested. 3 potential buyers show up. Paul is willing to pay $1,000 for the car. George is willing to pay $2,000 for the car. Ringo is willing to pay $8,000 for the car. George makes an offer of $2,000 first and Paul leaves. Answer the following questions:

a. Who will get the car and at what price?

i. Paul will come back and get the car for $1,000

ii. George will get the car for $2,000

iii. Ringo will get the car for $8,000

iv. Ringo will get the car for just over $2,000

b. What will the consumer surplus be?

i. 0 because the buyer is paying exactly his willingness to pay price

ii. Ringo will leave with a consumer surplus of just under $6,000

iii. Ringo will leave with a consumer surplus of just over $6,000

iv. Ringo will leave with a consumer surplus of $8,000

c. Suppose John was willing to sell the car for $1,500 but no less. What is the producer surplus in this case?

i. 0 because John did not get his expected price

ii. 0 because John got more than his expected price

iii. 0 because John got less than his expected price

iv. Just over $500 give the price he was able to sell it for that much more than his willingness to sell price

1.For a firm in a perfectly competitive market, marginal revenue for any positive level of output is

a) Greater than market price

b) Less than market price

c) The same as market price

2. Under what circumstances will a firm in a perfectly competitive industry definitely want to shut down all production in a short run setting?

a) When the market price is less than ATC

b) When the market price is less than AVC

c) WHen the market price is less than AFC

3. A perfectly competitive firm's supply curve is its

a)marginal cost curve.

b)average total cost curve.

c)average variable cost curve.

d) average fixed cost curve.

Suppose a perfectly competitive industry is in long run equilibrium. Then all but which of the following statements will be true for the firms in the industry?

a. price will equal marginal cost

b. price will equal minimum average variable cost

c. price will equal minimum average total cost

d. price will equal marginal revenue

In long run equilibrium, a monopolistically competitive firm will find that...

a. price is greater than both MC and ATC

b. Price is greater than ATC, but = to MC

c. Price is greater than MC but = to ATC

d. Price is = to MC and ATC

Firms in what market structure(s) set MR = MC to maximize profits?'

a. perfect competition

b. monopoly

c. monopolistic competition

d. all of the above

Firms in which market structure(s) are protected by "barriers to entry"?

a. perfect competition

b. monopoly

c. monopolistic competition

d. all of the above

A monopolist faces an inverse demand function given by P = 100 - 2Q. The firm's marginal cost is $20.  The firm currently is pricing at $40 and selling the quantity demanded. Its marginal revenue at this price/quantity combination is

a. is positive and above MC; the firm should lower its price and sell more

b. is positive but below MC; the firm should raise price and sell less

c. is zero; the firm should raise its price and sell less

d. is negative; the firm should raise its price and sell less

Firms in which market structure(s) generally don't find it profitable to advertise?

a. perfect competition

b. monopoly

c. monopolistic competition

d. none of the above; firms in all market structures generally find it profitable to advertise

.   

Assume you are given the following information for the economy of Macroland:

            GDP          C             S             I             G         (X – M)           AE              

                  0            200        _____    _____     _____           0          _____

            500            600        _____    100          100            0          _____

            1000          1000        _____    _____    _____           0          _____

            1500          ____        _____      100          100           0            _____

            2000          1800        _____       100          100           0            _____

            2500          2200        _____       100          100           0            _____

            3000          2600        _____       100          100           0            _____

            3500          ____        _____       100          100           0            _____

            4000          3400        _____       100          100           0            _____

            a. What is the MPC in this model? The MPS?

            b. Fill in the blanks in the table above.

            c. What is the level of equilibrium GDP? How do you know?

            d. If investment spending increases by $100, what is the new level of equilibrium

     GDP?

In meiosis, why do chromosomes first become visible through a compound microscope in the first stage of Prophase I?