What is the difference between total utility and marginal utility?
What will be an ideal response?
Ques. 2A single-price monopolist has the demand and marginal cost schedules given in the above table. What is the profit-maximizing level of output and price?
What will be an ideal response?
Ques. 3A decrease in the demand for eggs results in a surplus of eggs at the original equilibrium price. Explain how market forces will act to eliminate the surplus.
What will be an ideal response?
Ques. 4What problems are implicit in the concept of utility?
What will be an ideal response?
Ques. 5Comment on the following statement: A decrease in supply will lead to an increase in the price which decreases demand, thus lowering price. Therefore, a decrease in supply has no effect on the price of a good.
What will be an ideal response?
Ques. 6To the casual observer it is often difficult to understand how a company would spend several million dollars building a plant or other structure and then simply stop and abandon the project midway. How can this be justified on economic grounds?
What will be an ideal response?
Ques. 7Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.
What will be an ideal response?
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