Missing markets result from
a. high transactions costs of such markets.
b. strict price controls.
c. the inability of producers to gain economies of scale.
d. foreign countries dominating a domestic market for a product.
QUESTION 2In a competitive market, an efficient allocation of resources is characterized by
a. a price greater than the marginal cost of production.
b. the possibility of further mutually beneficial transactions.
c. the largest possible sum of consumer and producer surplus.
d. a value of consumer surplus equal to that of producer surplus.
QUESTION 3A deadweight loss of consumer and/or producer surplus occurs when
a. producers fail to maximize profits.
b. mutually beneficial transactions cannot be completed.
c. consumers do not maximize their utility.
d. the price of inputs increases.
QUESTION 4Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1 . If market demand is given by QD = 1050 50P, how much will be produced in the market?
a. 300
b. 400
c. 500
d. 600
QUESTION 5Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1 . If market demand is given by QD = 1050 50P, how much will the individual firm produce?
a. 3
b. 4
c. 5
d. 6
QUESTION 6Suppose there are 100 firms each with a short run total cost of STC = q2 + q + 10, so that marginal cost is MC = 2q +1 . If market demand is given by QD = 1050 50P, what is the equilibrium price?
a. 5
b. 10
c. 11
d. 50
QUESTION 7Suppose domestic beef producers face demand of QD = 1000 - 5P. Suppose the Chinese acquire a taste for U.S. beef such that their demand is QD = 500 - 5P. Market demand is now
a. 1000 - 10P for all P
b. 1500 - 10P for all P
c. 1500 - 5P for all P
d. 1000 - 5P for P > 100 and 1500 - 10P for P < 100
QUESTION 8Suppose domestic beef producers face demand of QD = 1000 - 5P. In the very short run 500 head of beef are produced. Suppose mad cow strikes a portion of the national herd and the amount brought to market falls to 400 . The price per head will rise by
a. 10
b. 30
c. 30
d. 50
Quick Reply
