D)itfacesadownward-slopingdemandcurve(1)

1、姓名：學(xué)號：Microeconomics IIMidterm04/15, 2008Multiple Choices (45 points)1) The above figure depicts the Edgeworth box for two individuals, Al and Bruce. Points a and b A) are most likely to reflect the final endowments after trading. B) are least likely to reflect the final endowments after trading. C)

2、 are equally likely to reflect the final endowments after trading than other points on the contract curve. D) are definitely not the final endowments after trading. 2) In a competitive marketplace, prices adjust until A) MRSs are equal to zero. B) excess supply equals excess demand equals zero in al

3、l markets. C) each consumer has maximized utility subject to his budget constraint. D) all firms earn zero profit. 3) If a society only cares about efficiency and not equity, then A) all points on the contract curve yield the same level of social welfare. B) it will not rely on competitive markets t

4、o allocate goods. C) it will maximize the utility of its worst-off member. D) an equitable outcome is impossible. 4) Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Measuri

5、ng food on the horizontal axis, the joint production possibility frontier A) will have a slope of -3/4 over the entire frontier. B) will have a slope of -2 when less than 20 units of food are produced. C) will have a slope of -1 when less than 20 units of food are produced. D) will have a slope of -

6、1/2 when less than 20 units of food are produced. 5) If a firm is able to set price A) is a monopoly. B) its marginal revenue is constant. C) it sells its output at a constant price. D) it faces a downward-sloping demand curve. 6) If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC

7、is constant at 16, then the deadweight loss from monopoly equals A) $21. B) $441. C) $882. D) $1,764. 7) The above figure shows the demand and cost curves facing a monopoly. At the profit-maximizing price, the elasticity of demand equals A) -1. B) zero. C) infinity. D) -3. 8) For a monopoly, margina

8、l revenue is less than price because A) the demand for the firms output is downward sloping. B) the firm has no supply curve. C) the firm can sell all of its output at any price. D) the demand for the firms output is perfectly elastic. 9) The fact that a monopoly has to take the shapes of marginal c

9、ost AND marginal revenue into account when making decisions is reflected in the fact that A) monopolies dont have a supply curve. B) monopolies dont have a demand curve. C) monopolies have the same supply curve as perfectly competitive firms. D) monopolies maximize profit. 10) When firms price discr

10、iminate they turn _ into _.A) producer surplus, revenue B) consumer surplus, profit C) total cost, profit D) producer surplus, consumer surplus 11) Quantity discrimination makes sense if A) buyers of smaller quantities are more price sensitive than buyers of larger quantities. B) buyers of smaller q

11、uantities are less price sensitive than buyers of larger quantities. C) demand for the good is perfectly elastic. D) the lower price for larger quantities encourages all consumers to purchase the larger quantity. 12) Two-part tariffs offer a mechanism whereby the firm can A) charge two different pri

12、ces to distinct groups of customers. B) collect two times as much from consumers as a single-price monopoly can. C) capture some or all of the consumer surplus. D) reduce some of its fixed costs. 13) The above figure shows a payoff matrix for two firms, A and B, that must choose between selling basi

13、c computers or advanced computers. Which of the following is a Nash equilibrium? A) Both firms make advanced computers. B) Both firms make basic computers. C) Firm A makes basic computers and firm B makes advanced computers. D) There are no Nash equilibria. 14) The term prisoners dilemma refers to a

14、 game in which A) there are no Nash equilibria. B) there are no dominant strategies. C) the payoff from playing the dominant strategy is the same for each player. D) the payoff from playing the dominant strategy is not the highest payoff possible. 15) In a sense, a cartel is self-destructive because

15、 A) it reduces consumer surplus. B) it sets price above marginal cost. C) each cartel member has the incentive to cheat on the cartel. D) each cartel member earns economic profit. 123456789101112131415BBADDBDAABBCCDCTrue or False (30 points)For the following, please answer True or False and explain

16、why.1) A competitive equilibrium is not Pareto efficient if some members of society are unable to afford a necessary good. Answer: False. The competitive equilibrium described is efficient since all consumers set MRS equal to the price ratio. The problem with the described equilibrium is one of dist

17、ributive justice not efficiency.2) A monopoly does not have a supply curve. Answer: True. A supply curve shows how much quantity a firm wishes to sell at any given price. First, the monopoly does not take price as given. The monopoly determines price based on the shape and position of its marginal c

18、ost curve and demand curve.3) A firm that practices multimarket price discrimination will set the lower price in the market that has the most elastic demand. Answer: True. The firm will equate marginal revenue across markets. Since MR = p(1 + 1/elasticity), markets with greater elasticity require lo

19、wer prices. 4) A perfect-price-discriminating monopoly maximizes social welfare as measured by the sum of producer surplus plus consumer surplus. Answer: True. Unlike the competitive market, however, social welfare is all producer surplus. There is no consumer surplus. Thus, while a perfect-price-di

20、scriminating monopoly is efficient, many are troubled by it based upon distributional issues. 5) Collusion is more successful in a game that will continue forever or in a game with an uncertain ending time, than in a game with a known ending time. Answer: True. In games with a known final period pla

21、yers will cheat in the final period. This is true because the final period becomes a single period game. By the same reasoning, players will cheat in the period prior to the last period, etc. Thus, when players know the last period, they are more likely to cheat in each period.Problems (35 points)1)

22、 (10 points) A weapons producer sells guns to two countries that are at war with each other. The guns can be produced at a constant marginal cost of $10. The demand for guns from the two countries can be represented as:QA = 100 - 2pQB = 80 - 4pWhy is the weapons producer able to price discriminate?W

23、hat price will it charge to each country? Answer: The firm can price discriminate because there are two identifiable segments with different elasticities. Since the two countries are at war, resale is doubtful. To solve, find marginal revenue for each and set equal to marginal cost of $10.MRB = 20 -

24、 (1/2)QB = 10 or QB = 20 and pB = 15.MRA = 50 QA = 10 or QA = 40 and pA = 30. 2) (10 points)How does competition ensure that the efficient product mix is attained? Answer: In a competitive market, producers choose an output level where marginal cost equals price. Thus, Px / Py = MCx / MCy. Each cons

25、umer maximizes her own utility subject to the given prices by setting MUx / MUy = Px / Py. Even though each is acting independently and in her own interest, the final outcome is that Px / Py = MRS = MRT, which is the condition for efficient product mix.3) (15 points)A monopoly sells music CDs. It has a constant marginal and average cost of 20. It faces two groups of potential customers：hone