B) transfers to the poor are reduced
C) government cannot control income of the population
D) education and training programs are popular
E) it creates incentives to increase efficiency
The optimal quantity of the good and the social cost because of the externalities are:
A) L; KMNP
B) F; KNP
C) L; KNP
D) F; KNM
E) F; KMNP
Imagine that you are you with your neighbour in the countryside in a big house.
Suppose that your neighbour decides to learn to play the piano. He plays it loudly and this distracts you.
The diagram below illustrates the situation. Your marginal costs tend to increase in the number of hours he plays the piano, while your marginal benefit in this case is zero for all hours. Your neighbour is marginal cost of playing the instrument is zero regardless of the number of hours. His marginal benefit declines if he increases the number of hours he plays.
A) how much money your neighbour should pay for you if he wants to play more hours (from... To)? What do you want to pay this money?
B) suppose that your mum who arrived several days ago has the same marginal cost function as you and the same marginal benefits from your neighbor's lessons. Is it because the new social marginal cost function and the new optimal number of hours of playing the piano.
C)
Continuing the case with your mum and you: how much would you pay your neighbour for further reducing the number of hours played?
(From.. To..)
Consider the market which can be described by the following functions:
MSC = - 100 + 5 Q
MPC = - 100 + 2,5 Q
MPB = 500 - 5Q
Find:
A)the optimal price and quantity
B) social efficient price and quantity
C) in which case the equilibrium quantity is greater?
D) are there any externalities? Add a positive or negative?
E) suggest a solution for the problem with externality
(7)
Industry A is perfectly competitive, while industry B is monopolised. Bought a constant average cost industries. If a lump-sum subsidy of 2£ is introduced what will be the effect on the final price?
A)A- increase by 2£, B- increase by more than 2£
B)A- fall by 2£, B- fall by more than 2£
C)A- fall by less than 2£, B- increased by less than 2£
D)A- increase by 2£, B- increase by less than 2£
E)A- fall by 2£, B- fall by less than 2£
Considering the monopoly who has such a situation on the market:
A) does it seems to be a natural monopoly?
B) express the function of the marginal revenue
C) find the optimal price and quantity
D) find firms profits
E) find consumer surplus and deadweight loss
F) suppose that average total cost fell by two dollars per unit.Find the C,D,E, for this case.
(8)
Sarah has a bakery, where she sells cakes. Every cake she decorates with cream, which cost 0,5 £ per portion. The cost of the cream is included into which of the following?
1. Marginal costs
2. Total Fixed costs
3. Total variable costs
4. Average variable costs
5. Average fixed costs
A) 1 and 2
B) 1 and 3
C) 1, 3 and 4
D) 1, 2 and 5
E) 1,2,4 and 5
A certain firm producers such amount of output that satisfies the equation: P=MC=MR=11£
Also it has such costs:
SATC = 16£
SAVC = 10£
What can we say about the profit?
A) positive
B) negative, but the production should be continued
C) negative and the production should be stopped
D) equal to zero
E) negative, but not enough information to comment that
(9)
Consider to firms X and Y which are operating in a perfectly competitive market in the short run. These are their costs.
Costs for Firm X
| Q | SFC | SVC | STC | SMC | SAFC | SAVC | SATC |
Costs for Firm Y
| Q | SFC | SVC | STC | SMC | SAFC | SAVC | SATC |
Required:
A) fill in the tables
B) depict SMC, SATC,SAVC on two separate graphs
C) suppose the market price for their good is 1£. Compute the output and profit of each firm.
D) Due to the fashion price increased by 4£. For this case compute the output and profit of each firm.
E) suppose there is a third firm M, which costs are given below. What will be the profit maximizing output for third firm if the price is 5?
| Q | SFC | SVC | STC | SMC | SAFC | SAVC | SATC |
(10)
(11)
Consider a profit - maximizing monopolist, who is facing such a situation on the market.
Required:
A) in case of no regulation find the optimal price and quantity, profit of the monopolist and the deadweight loss
B) Which type of economies of scale does a monopolist experience at the optimal quantity?
C) in case of perfect price discrimination calculate the quantity produced and the total revenue
D) the government decided to control the monopolist. Now he is to charge a single price and produce the social efficient quantity. The big dissertation on a separate graph and identify social efficient quantity and the consumer surplus for this case.
E) (continue the case given in C) Calculate the monopolists profits and explain your results.
(12)
Consider a monopolist, who is facing linear demand. Calculate the price elasticity of demand in the optimal point if it is known that in that point the total revenue is 3/4 of the maximal.
(13)
There are eight people in a small village. Each person has a choice either to hunt for wild hogs in the forest, located near the village, or to work in a factory. Daily wage in the factory is 4£, while hogs can be sold in competitive markets for 1£ each. The total number of songs is given by an equation: H= 8N -2N^2, where N is the number of persons hunting. Generally people preferred to hunt unless they expect to earn more money in the factory.
Required:
A) calculate the number of people, who will work on the factory and hunt, if they decide individually, and the total earnings for the village.
B) calculate the total earnings of the village with the socially optimal number of hunters.
C) comments on the difference between a number of hunters in A and B.
(15)
On a perfectly competitive market both supply and demand are linear. Supply is constantly unit-elastic. Also, it is known that if all firms will form a cartel and will behave as a monopolist, and sum of their total revenues will not change.
Required:
A) calculate the % changes in the equilibrium price and quantity in case of formation of a cartel.
B) calculate the percentage change in the total profit of all firms if there fixed costs are equal to 0.
C) calculate the price elasticity of demand in the initial and final points.
D) find the Lerner index for the cartel.
(16)
Supply and demand function on the market of cookies can be described by the following functions:
Q = a-bP, Q=c+dP,
where c is greater than zero.
Price on the world market is Y and it is a less than the equilibrium price on the domestic market. The domestic economy is small end open.
Required:
Calculate the lump-sum tax for foreign companies if the government wants to maximize tax revenues.
There are two groups of consumers (R and P) on the market of good X. Each of the two groups demand is linear. The unit price elasticity is reached by each demand, when R group wants to buy 100 units of X and P group wants to buy 90 units.
Also, it is known that at the price of 47,5 £/unit, the total revenue of all firms, who sell good X, is at peak. At this price both groups can afford this good.
The current price is only 20 £/unit, also now the expenditures on good X of both groups are equal, and the price elasticity of supply is equal 1.
After a damages from natural disaster the supply fell. In particular the quantity supplied decreased by 30 times at all price levels.
Required:
Compute the percentage change of the total revenue of all sellers of good X after the disaster.
(18)
Consider oligopolistic market with two firms (A and B). They decided to form a cartel. There costs can be described by following functions:
TC(qA) = 0,5 q^2, TC(qB) =q^2 + 2
Required:
Find the total costs of the cartel by the least-cost method.
(19)
There are two groups of consumers on the market of good Y, their demands are linear and they are priced elasticities are equal and are - 1,5.
Also, it is known that the total revenue got by all firms on this market are equal at prices 4 and 12.
Required:
Find the kink point of the market demand.
(20)
There is a monopolist on the market, whose costs can be described by the following function TC = Q^3 - 10Q^2 + 50Q
The demand for his product is: P= 98-10Q
The government wants to regulate the monopolist, but in order not to distract the market significantly, this will be done in three steps:
1. The price ceiling will be introduced by the level of T, which is higher than the initial price, but the quantity produced will not change.
2. The price ceiling will be lowered up to U, where the quantity produced will be at its peak.
3. The price ceiling would be even more all worked up to the level W.
Note: the final price W, it doesn't matter for a monopolist to produce order to leave the market.
Required:
A) calculate the initial profit of the monopolist
B) calculate the profits of the monopolist at each step of government regulation.
A firm, which is a monopolist on the market of good Z, has linear marginal costs and faces a linear demand. A per unit tax (t), introduced by the government, has the following characteristics
1. The tax revenues is maximal
2. The price fell by 20% from the initial level.
Required:
Find the price elasticity of demand in the initial equilibrium.
The monopolist cost function is: TC = 2Q^2 + 5Q
The demand for his product is: Q=A-P, where a is a parameter.
It is known that the price will grow by 8%, is a per-unit tax of 3 £ will be introduced.
Required:
Find the interval for A.
(21)
A firm is a monopolist on the market of good X in a certain country. This country's currency is labelled as $. The firm uses foreign materials which is bought at a price 5£/kg. Each unit of X requires 1 kg of materials. All other costs of this firm can be described by an equation C($) = 5q^2. The domestic demand for X is: P= 90-5q, the world price for X is 10. The domestic economy is small and open.
Required:
For every positive exchange rate (let it be denoted as E), find the optimal quantity of production.
There are 20 areas in the certain country. There are three ways of ranking these regions by the degree of income inequality:
1. By the Jinny coefficient
2. By dividing each region's population into two groups and computing a proportion: (average income in the rich group) / (average income in the poor group).
3. By computing the proportion:
(Income of the 20% of the richest population in the area) / (income of the 20% of the poorest people in the area)
Note: each area has different level of income inequality in each of three ratings.
Required:
A) compare the ratings 1 and 2. Are they equal?
B) comparing the ratings 1 and 3. Are the equal?
C) compare the ratings 2 and 3. Are the equal?
Consider a certain firm, who is a monopolist on the markets of goods X and Y. Demand functions on both X and Y are linear, but at every price level the coefficient of price elasticity of demand on good X is higher than the same coefficient of good Y. Also, it is known that if the price is between 10 and 15, one demand function is elastic and the other is not. This is true only for this price interval. The monopolist's costs are TC = cQx + dQy, where c and are constant prices for purchasing these goods from abroad.
Required:
A) compute C, D and the price if it is known that in the optimal point prices for X and Y are equal and the price elasticity coefficient for good X is 3.5 times more (modulo) then the coefficient for good Y.
B) consider the case if the provider proposed the new price (w) for a monopolist for both X and Y is equal to w= (c+d)/2
Note: Revenues from selling x initially formed half of the monopolist's revenue.
Will the monopolist in re this proposal? The rule for in agreement is: the monopolist's profit should increase.
(22)
The demand curve phased by and perfectly competitive firm is:
A) perfectly inelastic
B) relatively inelastic (the coefficient is less than 1)
C) unit elastic
D) relatively elastic (the coefficient is greater than 1)
E) perfectly elastic
What is the main difference between the long run and the short run:
A) in the long run the amount money available for investment is greater
B) in the long run it is possible to start or leave the market
C) in the long run we are all dead
D) in the long run it is possible to vary the amount of capital
E) in the long run it is possible to vary the amount of all inputs
Other things equal, if the wages increase, this will lead to changes in the curves:
1. ATC
2. AVC
3. AFC
4. MC
A) 1 and 2
B) 1 and 4
C) 1,3,4
D) 1,2,4
E) 1,2,3,4
A perfectly competitive firm faces a price 500 £/unit.
His costs are:
| Quantity | MC | AC |
The optimal quantity is:
A) 0
B) 1
C) 2
D) 3
E) 4
If a firm faces increasing economies of scale, this means that its:
A) LRMC is rising
B) LRAC is falling
C) LRTC is rising
D) SMC is falling
E) SAC is rising
(23)
A best example of activity with externality is:
A) opening a flower shop
B) vaccination
C) donation to charity
D) drunk driving
E) opening a private parking
Which of the following has a best reference to the free rider problem:
A) free buses, which run if an underground station is closed
B) fresh air
C) private school
D) Concierge
E) Underground
The decision on the production of pure public good is usually made by:
A) the President
B) the people who need it
C) private companies
D) the government
E) none of the above
(24)
A certain firm has the following situation on the market:
| Price for unit (£) | |||||||
| Ouantity demanded (units) |
| Total costs (£) |
The wage of each worker is £100 a day.
Required:
A) find marginal revenue product of labour and average revenue product of labour for each quantity
B) find an expression of average revenue product of labour in terms of price and depict it on a separate graph.
A firm has such a situation on the market:
| Labor units | |||||
| Quantity produced | |||||
| Price for such quantity |
Required:
A) find marginal revenue and marginal costs for each quantity
B) find the optimal price and quantity
C) find the minimum price which can the firm set.
D) an advertising costs 200'000 $. If a firm will use it, the demand for its product should grow by 10,000 units at every price level. Should the firm use it?
(25)
Perfectly competitive firm tries to maximise its profit. Price of its product is $10 per unit. It hires workers on a perfectly competitive labour market, word equilibrium wage is $500 a month.
The production data is given in the table below:
| Units of labor | ||||||
| TPL |
The optimal number of workers for the firm is:
A)2
B)3
C)4
D)5
E)6
A monopolist on the product market will hire more workers until:
A) W=P*MPL
B)W*P=MPL
C)MPL*MR=W
D)MR*W=MPL
E)W*MR=MC
A certain firm uses labour and capital to produce the good. For the current quantity produced the data is:
MR=3£, MPL=2, MPK=5, Pk=20£, PL=1£
In order to maximize the profit firm should use:
A) more labour, more capital
B) less labour, less capital
C) more labour, less capital
D) less labour, more capital
E) leave everything as it is
True or false?
Supply curve of the land is close to absolutely inelastic.
Discrimination occur, when equally productive workers have different wages.
There are three groups of consumers for television:
Q1= 50 - 1,25P
Q2= 24 - 0,5P
Q3= 60 - 2P
Q4= 62,5 - 2,5P
Where Q is the number of consumed hours of television. Costs for translation of television are 69 £ per hour, which is not affordable for any separate group.
Required:
Find equilibrium price and quantity.
On a perfectly competitive market demands can be described as a function:
Q=2000-P
Each friend has are such a function of costs:
TC(q)=q^2+16 for positive q
0 for q=0
Required:
Find the number of firms on the market in the long run period and the optimal quantity for each firm.
Are certain firm initially produces q0 units of good and sells them for p0 each.
It is known that the point (p0;q0) is on the demand function. For the same price a firm can sell up to q1 units of good. At the same time, it can raise the price up to p1 producing the same amount q0. Furthermore, at that point (p0,q1) the total revenue of a firm 500£ more, then in the point (p1,q0); and the arkelasticity between these two points is (-3).
Point (p1,q1) is above demand curve for the firm's product, but it might be reached by the advertising company.
Note: the unknown demand function might not be linear.
Required:
Calculate the absolute change of the total revenue is a friend moves from point (p0;q0) to (p1;q1).
A perfectly competitive firm has such costs:
TC=0,5Q^2,
But it can't produce the quantity in the interval (1,3).
Required:
A) find the supply function of this firm
B) construct the supply function on a separate graph.
C) there is an opportunity to upgrade the technology of production which will result in possibility to produce any positive quantity. What is the fair price for such upgrade?
(27)
Little Jinny has search utility function from consumption of biscuits and toys.
Required:
A) calculate total utility from purchasing three toys.
B) the price of biscuit is 2£, the price of a toy is 1£, little Jinny's income is 11£. How many toys and biscuits should she consume?
C)Jinny's income elasticity for biscuits is -0,2. Biscuits and toys for Jinny are substitutes or compliments?
Nearly every person in the world love cakes so they are freely traded in the world market. Imagine a country, Cakeland, which is relatively small in comparison to the rest of the world. Some cakes are produced domestically while the rest is imported. The graph below represents the situation.
Required:
A) Calculate the amount of cakes imported to the Cakeland use the world price is 2 pounds per unit.
B) The government of the key plant imposes a prehearing attacks on imports and the new domestic price will then be 4 pounds per unit.
Find the new equilibrium in the Cakeland's market, then you'll consumer surplus and the tax revenue collected by the government.
(26)
A firm "Abbibas" is the only producer of sports equipment in the country. It has such costs:
TC= 40q+500,
and faces the demand:
Q=240-2p
This firm has to pay a specific tax:
A Percent of the total revenue (as a part of their buyers price)
Also, a firm get a subsidy for each unit of sports equipment produced.
A funny thing here is that the amount of text and the amount of subsidy equals each other.
Required:
A) Calculate the tax rate and subsidy rate if it is known that a firm increased its output by 25% from the initial level after the introduction of such policy.
B) Prove that if the amount of tax paid and the amount of subsidy got are equal, than demand and costs functions doesn't matter, a profit of the firm can not increase.
A firm has three factories, on which it can produce a good X. In the table below you can see the monthly costs of the term for each factory.
Required:
Find the total cost function for all three factories which depend on the quantity produced.
Note: the quantity can be only an integer number.
(35)
A firm "Eurocement" is producing cement in three steps.
1. At first, it is needed to produce a mixture of clay and chalk, lets denote this as (CLC).
The production of one tone of CLC can be described by the following function:
Q(CLC) = L^0,5 * K^0,5
2. In order to produce the glue, which will fix the cement, it is needed to take 2 units of CLC and 3 units of labour.
3. Finally, in order to produce cement, it is needed to take the glue and add the rest of the components, which are bought for 5 dollars per tone.
4 tones of cement = 3 tones of glue + 5$ (for the rest of the components).
The firm has only one unit of capital. The rent is $16. The wage is one dollar.
Required:
Find the total cost function for the firm which depend from the quantity of cement produced.
(32)
After the imposition of the subsidy from the government we can expect that:
A) supply curve will move to the left
B) supply curve will move to the right
C) demand curve will move to the left
D) demand curve will move to the right
E) nothing will change.
Is the head of the Ministry of health has advised to eat more apples so this will lead to all work and risk of cancer which of the following we should expect:
A) supply curve will move to the left
B) supply curve will move to the right
C) demand curve will move to the left
D) demand curve will move to the right
E) nothing will change.
A cross price elasticity is more than zero, this shows us that the two products are:
A) independent
B) luxuries
C) compliments
D) substitutes
E) necessities
Is the price of a substitute product is constant while the price of a product decreases for whatever reason and this leads to decrease in consumption of this product, this is called the:
A) demand rule
B) supply effect
C) diminishing marginal consumption
D) income effect
E) substitution effect
Which of the following describes the consumer surplus definition:
A) the total utility of a good divided by its price
B) consumers in your savings multiplied by marginal utility of that code
C) the residual value
D) the marginal utility of the good divided by the price
E) the price divided by the marginal utility
The principle of diminishing marginal utility states that:
A) marginal utility curve is constant
B) marginal utility decreases if one consumes more of a good
C) marginal utility increases if one consumes more of a good
D) both marginal utility curve and total utility curve decrees
E) total utility code is constant
A production of a certain private good is accompanied by a negative externality, what will most likely help the market to move to a socially efficient outcome:
A) introduce a subsidy for a firm
B) introduced a subsidy for the customers
C) impose a tax
D) increase the competition
E) move the furniture another place.
There was a negative externality in production of a certain good, but after the government policy the efficient outcome was reached. What happened to the market equilibrium price and quantity:
A) price did not change; quantity rose
B) price rose; quantity rose
C) price fell; quantity rose
D) price fell; quantity fell
E) price rose; quantity fell
A certain firm started the business. To a fixed amount of capital it added one unit of labour (output increased to 100), after that one more unit of labour (output increased to 150), and finally one more unit of labour (output increased to 175). This is the example of:
A) increasing returns to scale
B) the increasing returns to scale
C) constant returns to scale
D) increasing marginal productivity of labour
E) diminishing marginal productivity of labour
The shutdown price for the short runcan be described as:
A) minimum of ATC
B) maximum of AVC
C) maximum of ATC
D) minimum of MC
E) minimum of AVC
GRAPH!!!!!!!!!
The total profits for the monopolist are:
A)
B)
C)
D)
E)
The total cost for the monopolist are:
A)
B)
C)
D)
E)
Oligopolist have rival firms which follow a price decrease but not a price increase. The demand he faces can be best described as:
A) horizontal
B) significantly elastic
C) significantly inelastic
D) vertical
E) kinked
Is the ratio of marginal physical product of labour and capital are
MPPk/Pk >MPPL/PL
it is better to:
A) increases the amount of capital
B) increase the amount of labour
C) lower the wage
D) decrease the price of capital
E) shut down
And monopolistic competition in the long run can be best described as:
A) significant barriers
B) similar products
C) price equals two minimum of average cost
D) socially effective equilibrium
E) zero economic profits
The concept of consumer surplus can be best described as:
A) a consumer has bigger income then his expenditures.
B) there is an equilibrium on the market
C) the second unit of a good costs less for a consumer than the previous unit
D) the consumer pays less for a unit of board then it brings to him in terms of utility
E) the consumer pays exactly his reservation price
The economies of scale can be best described as:
A) average costs decreases, as output decreases
B) average costs increases, as output increases
C) as inputs double, the output triples
D) as inputs double, the output doubles
E) as inputs double, the output stays constant
The total revenue will fall by 30% if the price fall by 15%,
so we can conclude that:
A) the coefficient of price elasticity of demand equals to 1
B) the demand is inelastic
C) the demand is elastic
D) a demand is kinked
E) a firm is a monopolist
Is the increase in the price of a good leads to increase in the quantity demanded of another good, we can say that these goods are:
A) substitutes
B) compliments
C) inferior
D) normal
E) luxury
Choose the correct statement:
A) economic costs equal to explicit costs blast implicit costs
B) economic cost equal to economic profits
C) economic costs equal to explicit costs minus implicit costs
D) implicit costs equal to accounting costs
E) economic profits equal to accounting profits
A firm's market power can be measured by the formula:
A) (MC-P)/MC
B) (MC-P)/C
C) (MC-P)/P
D) (P-MC)/P
E) (P-MC)/MC
For a certain firm a production of one unit of good costs 1 pound. If the price is more than 9 pounds nobody is willing to buy it, but if a price is less than 9 pounds per unit, then the consumers will be willing to buy 1000(9-P) is unit of a good.
Required:
A) if a government imposes a tax of 1 pound per unit sold, calculate the tax revenue of the government and the profit of a firm.
The only two preferable for Jamie: biscuits and tea. For each cup of tea she needs exactly two biscuits.
Required:
A) draw Jamie's indifference curve.
B) suppose that the price of tea is £20 per cup and the price of a biscuit is 1 pound.
Jamie has £44 to spend on tea and biscuits.
Evaluate Jamie's budget constraint, draw it on the same graph, find the optimal bundle.
Imagine a situation that Josh is keen on playing football and hates doing homework, so that he needs to play football for one hour to compensate the stress when doing one homework. Which of the following best represents his preferences:
A)
B)
C)
D)
E)
The price of goods X fell, this situation is depicted on the graph below. We can conclude that the coefficient of income elasticity of the good x is:
A) one
B) the opposite sign of the cross price elasticity
C) the same sign as cross price elasticity
D) infinity
E) zero
Consider the following diagram.
Choose the correct statement from the list below:
A) a consumer is indifferent between A and D
B) bundle E is the best
C) bundle D is the worst
D) bundle C is just as good as bundle A
E) bundle B is better than bundle E
(34)
Alex is now at a point A. The movement to which point may not increase his utility:
A) M
B) N
C) F
D) L
E) K
A price for is imposed by the government at the level which is lower than the current equilibrium price. This will leave it to:
A) increase in price
B) decrease in quantity
C) deficit of the good
D) surplus of the good
E) no changes
Considering the case when ball supply and demand increase simultaneously, this will result in:
A) increase in price
B) decrease in quantity
C) deficit of the good
D) surplus of the good
E) no changes
If all of the tax burden is carried by consumers we can conclude that:
A) supply is perfectly elastic
B) supply is perfectly inelastic
C) demand is perfectly elastic
D) demand is unit elastic
E) not enough information
While keeping the same level of utility an individual can "exchange" consumption of one good for consumption of another good at a certain rate. This is the definition of:
A) MRS
B) MRTS
C) MPP
D) MRP
E) IRS
The rule for equilibrium MR=MC works for which of the following:
A) perfect competition
B) monopolistic competition
C) oligopoly
D) all of the above
E) None of the above
(36)
In certain countries there are two equal groups of population: the poor and the rich. Happiness of any person in the country can be measured by the formula:
H=Y-x^2/2
X is the number of hours worked.
The only difference between the rich and the poor is that is appointed person works X hours he getsV*x, and the rich person gets W*x. Every person in the country is rational and chooses X sad as his happiness will be maximal.
The rich pay a part of their income as tax at the rate of t, this text is transferred to the poor.
Required:
A) calculate the total income of both groups.
B) if W=3, V=2^0,5
Find T is the aim of this policy is to minimise the Ginny coefficient.
The demand for a good X can be described by the following function:
Q=a-bP (a and B are positive)
The supply function is:
Q=cP (C is positive)
The government has two options how to lay the tax:
1. Per-unit tax on producers at the rate of t
2. The lump-sum tax T, laid on each firm.
Required:
Prove that at a certain rate of t, the revenues from the tax might be equal.
(39)
Imagine the situation that a certain consumer has a choice between two goods which have different prices.
After certain changes the slope of the budget line remained constant. This can be explained by:
A) budget slope always changes, this situation is imaginary
B) prices of two gourdes decreased by the same % from the initial price
C) prices of two good increased by the same amount
D) prices of two gourdes increased by the same % from the initial price
E) not enough information
(40)
Considering the natural monopoly in the long run. The amount of subsidy for the monopoly in order to compensate the losses, if efficient level is reached, is:
A)
B)
C)
D)
E)
A perfectly discriminating monopoly is operating on the market. It has such costs:
MC=4Q+3,
the demand function is:
Q=33-P
The dead weight loss for this monopoly will be:
A) 0
B) 1
C) 1,5
D) 2
E) 2,5
A monopoly is operating in the short run. At first, it had no discrimination, but after eat introduced discrimination of the 1st degree. Estimate the numerical change in the consumer surplus:
A)
B)
C)
D)
E)
The buyers will get a less benefits from a per-unit subsidy and then sellers if:
A) supply is less elastic then demand
B) supply is more elastic then demand
C) supply is as elastic as demand
D) both supply and demand are perfectly elastic
E) both supply and demand are inelastic
After the introduction of a price ceiling on a monopoly in the short run at the level which is much lower than the initial equilibrium price, the dead weight loss is most likely to:
A) increase
B) decrease
C) do not change
D) disappear
E) not enough information
The production of a certain good on the monopolistic market has external effects to 3rd parties. Our key to the efficient quantity can be achieved by:
A) per-unit subsidy
B) per-unit tax
C) closure of production
D) no intervention
E) not enough information
The closer the Lorenz curve is to a diagonal line, the
A) bigger income inequality is.
B) smaller income inequality is.
C) bigger tax rate should be introduced
D) smaller tax rate should be introduced.
E) bigger a proportion of a middle class exists in the country.
The amount of good X consumed rose, and the amount of good Y consumed is fixed, so we can conclude that:
A) there is a movement to a higher Indifference curve
B) there is no movement of IC, goods are complements
C) there is no movement of IC, goods are substitutes
D) it is better to an individual
E) it is worse for individual
Answers:
Chapter 1
MC:
Problems:
Chapter 2
MC:
Problems:
Chapter 3
MC:
Problems:
Chapter 4
MC:
Problems:
Chapter 5
MC:
Problems:
Chapter 6
MC:
Problems:
Chapter 7
MC:
Problems:
Chapter 8
MC:
Problems:
