answer following questions Question Detail: Question 1 Consider the market for movies in which there are two types of consumers (students and non-students) with demand curves given by the...

Question 1

1. Consider the market for movies in which there are two types of consumers (students and non-students) with demand curves given by the following:Student: q=30-2pNon students: q=30-pIf the marginal cost (and average cost) of movies is constant and equal to 8, then third degree price discriminating monopolist would sell movies to students at a price of _____ and non-students at a price of _____.Answer

   $7.00; $11.00

   $11.00; $5.50

   $11.50; $19

   $19; $11.50

   None of the above

1 points

Question 2

1. Which of the following statements is true?Answer

   In perfect competition and monopolistic competition price is equal to marginal revenue.

   In perfect competition and monopolistic competition firms maximise profit by choosing a point where marginal revenue is equal to marginal cost.

   In perfect competition and monopolistic competition firms earn zero economic profit in the short run.

   a and b are correct.

   a, b and c are all correct.

1 points

Question 3

1. Consider a single price monopolist that has the demand curve and cost curves indicated in the following diagram. The monopolist leads to a deadweight loss of:Quiz XXXXXXXXXXpngAnswer

   100

   250

   1,250

   2,500

   None of the above

1 points

Question 4

1. Consider a competitive where each firm’s total cost function is given by TC = 0.5q²+ 200. Market demand is given by Q = 3000-5P. In the long run, consumer surplus will be equal to:Answer

   0

   2,900

   240,000

   841,000

   Additional information on the number of firms is needed to answer this question.

1 points

Question 5

1. A competitive industry currently consists of N= 10 identical firms. An individual firm’s total cost function is given by TC = 0.5q²+ 200. Market demand is given by Q = 3000-5P. In the long run, how much will each firm produce in equilibrium?Answer

   q = 0

   q =20

   q = 200

   q = 2000

   None of the above

1 points

Question 6

1. A competitive industry currently consists of N= 50 identical firms. An individual firm’s total cost function is given by TC = 0.5q²+ 200. Market demand is given by Q = 3000-5P. Which of the following is true?Answer

   The firm will shutdown in the short run and exit the market in the long run.

   The firm will shut down in the short run, but stay in the market in the long run.

   The firm will produce a positive amount in the short run and increase production in the long run.

   The firm will produce a positive amount in the short run and decrease production in the long run.

   There is not enough information to answer this question.

1 points

Question 7

1. In the short run, the point at which diminishing marginal returns begins is the point at which the marginal cost curve:Answer

   Is highest.

   Reaches a minimum.

   Is upward sloping.

   Is downward sloping.

   None of the above as diminishing marginal returns refers to marginal physical product.

1 points

Question 8

1. Consider a single price monopolist that has the demand curve and cost curves indicated in the following diagram. If a per unit tax of $20 is imposed on the monopolist, equilibrium price will increase by:Quiz XXXXXXXXXXpngAnswer

   0

   10

   20

   40

   None of the above

1 points

Question 9

1. Assume that a competitive firm maximises short run profits by producing a positive quantity of output. Which of the following is true at that level of output:Answer

   p>MC

   MR=MC

   p=AVC

   Both b and c are correct

   Neither a, b nor c is correct

1 points

Question 10

1. Consider the valuation placed on two movies (Great Expectations and Alby Mangels Surf Safari) by two Theatres located in Newtown and Miranda:

   Great Expectations	Alby Mangels Surf Safari
   Newtown Dendy	$12,000	$3000
   Miranda Greater Union	$10,000	$4000

   If the film distributor is a monopolist, which of the following strategies will maximise profits?Answer

   Charge $10,000 for Great Expectations and $3,000 for Surf Safari

   Charge $12,000 for Great Expectations and $3,000 for Surf Safari

   Charge $10,000 for Great Expectations and $4,000 for Surf Safari

   Bundle the films and sell them together at a price of $14,000

   Bundle the films and sell them together at a price of $15,000

1 points

Question 11

1. Assume that the cost of producing T-shirts is given by TC=100 + 3q. Which of the following is true at all levels of production?Answer

   MC

   MC=ATC.

   MC>AFC.

   ATC is constant.

   None of the above are true.

1 points

Question 12

1. A competitive industry currently consists of N= 10 identical firms. An individual firm’s total cost function is given by TC = 0.5q²+ 200. Market demand is given by Q = 3000-5P. In the short run, how much will each firm produce in the equilibrium?Answer

   q = 0

   q =20

   q = 200

   q = 2000

   None of the above

1 points

Question 13

1. Assume that individuals are homogeneous and that each has a demand curve of the following form for internet service: p=10-0.5q where p is the price per hour and q is hours per month. Assume the firm has a constant marginal cost of $1. The profit maximising two-part tariff results in the firm selling ______ hours to each consumer and receiving total revenue of ________ from each consumer:Answer

   9: 18.

   10: 18:

   18: 99.

   10: 99.

   18: 81.

1 points

Question 14

1. At present, a typical firm in a perfectly competitive market has the following total cost function: TC = 100+q². In the long run, the industry supply curve:Answer

   Will slope upwards.

   Will slope downwards.

   Will be perfectly elastic.

   Will be perfectly inelastic.

   There is not enough information to answer this question.

1 points

Question 15

1. A monopolist faces a demand curve given by Q=50-(p/2) and has constant marginal (and average cost) of 16. The monopolist maximises profit by setting price equal to:Answer

   16

   21

   25

   58

   None of the above

1 points

Question 16

1. Under first degree price discrimination a firm maximises profit by:Answer

   Producing where price equals average cost.

   Producing where marginal cost meets the demand curve.

   Producing where the difference between marginal cost and the demand curve is greatest.

   Producing where marginal revenue equals marginal cost.

   Both b and d are correct.

1 points

Question 17

1. In the long run a monopolistically competitive firm:Answer

   Earns zero economic profit.

   Sets price equal to marginal cost.

   Have no market power because they earn zero economic profit.

   Produces at minimum average cost.

   a, b and c are all correct.

1 points

Question 18

1. Consider the cost curves for a competitive firm in the diagram below. If the firm is to earn positive economic profits price must exceed.Quiz 4 - 5.pngAnswer

   $0.

   $5.

   $10.

   $11.

   $15.

1 points

Question 19

1. Assume that the cost of producing T-shirts is given by TC=50 + 2q. The average total cost of producing the fifth shirt is equal to:Answer

   2.

   10.

   12.

   52.

   60.

1 points

Question 20

1. Consider a single price monopolist that has the demand curve and cost curves indicated in the following diagram. The monopolist maximises total profit by selling _____ units at a price of _____:Quiz XXXXXXXXXXpngAnswer

   100; 100

   100; 50

   50; 100

   50; 150

   None of the above