In the above figure, the total revenue for a single-price monopolist is shown by the area
A) 0P5fQ1.
B) P2P4eb.
C) 0P3cQ1.
D) 0P4eQ3.
Ques. 2In the above figure, the marginal cost curve is curve
A) A.
B) B.
C) C.
D) D.
Ques. 3What are some of the potential obstacles that can prevent a market from reaching the efficient outcome? Briefly define each obstacle.
What will be an ideal response?
Ques. 4Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?
What will be an ideal response?
Ques. 5The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium output will be
A) 2,000 tons.
B) 3,000 tons.
C) 4,000 tons.
D) 5,000 tons.
Ques. 6Suppose some firms in a perfectly competitive market are incurring an economic loss. As a result,
A) all the firms will eventually incur an economic loss.
B) some firms will leave the market and the price of the good will rise.
C) some firms will leave the market and the remaining firms' quantity will decrease.
D) the total market economic profit must equal 0.
Ques. 7When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?
What will be an ideal response?
Ques. 8John's utility of wealth curve is shown in the above figure. He currently has total wealth of 20,000. If there is a 50 percent chance that his 10,000 car will be stolen, then his expected wealth equals
A) 0.
B) 10,000.
C) 15,000.
D) 20,000.
Ques. 9When Fatz confectionery can lower the cost of manufacturing and packaging a pound of candy by doubling the quantity manufactured and packaged each day, it will achieve
A) economies of scope.
B) economies of scale.
C) economies of team production.
D) all of the above
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