What would be an example of economies of scope achieved in the automobile insurance industry?
What will be an ideal response?
Ques. 2Monopolists are able to price discriminate because
A) of differing willingness to pay among consumers.
B) of differing price elasticities of supply.
C) they have constant marginal cost.
D) they have constant average cost.
Ques. 3A textbook publisher is in monopolistic competition. The firm can sell no books at 100 a book, but for each 10 cut in price, the quantity of books it can sell increases by 20 books a day. The firm's total fixed cost is 2,400 a day.
Its average variable cost and marginal cost is a constant 20 per book. What is the firm's maximum economic profit? A) zero
B) 800
C) -400
D) 1,000
Ques. 4In the above figure, which of the following statements is FALSE?
A) The total fixed cost curve is curve C.
B) Total variable cost and total cost both increase as output increases.
C) Marginal cost is equal to the slope of curve A.
D) The vertical gap between curves A and B is equal to average fixed cost.
Ques. 5City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve.
The lowest wage rate at which City-Mart can hire 40 hours of labor per day is A) 8 per hour.
B) 12 per hour.
C) 4 per hour.
D) 9 per hour.
Ques. 6There is discrimination in the labor market on the planet of Yerk between two groups of people, the Mirks and the Morks.
If the discrimination is against the Mirks, then the VMP curve for Mirks is ________ the VMP curve for Morks, and the Mirks receive ________ than the Morks. A) to the left of; the same wage rate, but fewer are employed
B) to the right of; the same wage rate, but fewer are employed
C) to the left of; a lower wage rate
D) to the right of; a lower wage rate
Ques. 7Suppose that Alyssa spends all her income on video games and DVDs and her marginal utility per dollar from video games equals that from DVDs. Is Alyssa maximizing her utility? Now, suppose that the price of a DVD falls.
Should Alyssa change the combination of goods she consumes? If yes, how? Explain.