In the above figure, the monopolistically competitive firm makes an economic profit of
A) 0.
B) between 0 and 50 per day.
C) between 50.01 and 100 per day.
D) greater than 100.01 per day.
Ques. 2Dell and Gateway must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above. (The profits are in millions of dollars). In the Nash equilibrium
A) Dell keeps its prices high and Gateway lowers its prices.
B) both Dell and Gateway lower prices.
C) Gateway keeps its prices high and Dell lowers its prices.
D) both Dell and Gateway keep prices high.
Ques. 3In the figure above, the curve labeled W can be a
A) monopoly's demand curve.
B) monopoly's marginal revenue curve.
C) perfectly competitive firm's demand curve.
D) perfectly competitive firm's marginal revenue curve.
Ques. 4Average total costs are
A) total costs divided by total output.
B) total output divided by total costs.
C) the change in total costs divided by the change in output.
D) the change in output divided by the change in total costs.
Ques. 5For monopoly
A) the four-firm concentration ratio is 100.
B) the Herfindahl-Hirschman Index is 10,000.
C) there is only one firm in the industry.
D) All of the above answers are correct.
Ques. 6In the above figure, the vertical distance between the ATC and AVC curves is
A) the marginal cost.
B) the total cost.
C) the average fixed costs.
D) None of the above answers is correct.
Ques. 7Adriana wants to try working as an independent contractor this summer. She has a 50 percent chance that she will make 9,000 and 50 percent chance that she will make nothing. What's Adriana's expected income?
A) 4,000
B) 4,500
C) 2,000
D) 3,000
Ques. 8The above figure shows the Lorenz curves for four different countries. Which of the following statements CANNOT be made on the basis of the graph?
A) Incomes are distributed unequally in all four countries.
B) Income distribution in country D is the most unequal among the four countries.
C) Incomes are higher in country A than in country B.
D) Income distribution is more equal in country B than in country D.
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