2/16/2016

IVLEAssessment

EC1301PostLectureQuiz5(GRADED)

AssessmentTitle:
PostLectureQuiz5(GRADED)
NumberofAttempts:
3outof3
StudentName:
LIUXINCHENG
Duration:
2m59s
StartTime:
16Feb201610:03PM
TotalMarks:
10outof10

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Section1
1)EquilibriuminMonopolyMarkets
Intheshortrun,amonopolymay
onlyearneconomiclosses.
onlyearnzeroeconomicprofit,
onlyearnpositiveeconomicprofits.
earnpositiveeconomicprofitsoreconomiclosses.
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YourAnswer: earnpositiveeconomicprofitsoreconomiclosses.
YourMarks: 1outof1
2)Inanincreasingcostindustry,thelongrunsupplycurveis
positivelysloped.
horizontal.
vertical.
negativelysloped.
YourAnswer: positivelysloped.
YourMarks: 1outof1
3)PriceDiscrimination
Movietheaterschargelowerpricestochildrenandseniorcitizensbecause
theyhavemoretimetoattendmovies.
theygotomoremovies,sotheygetpricebreaks.
theyfeelsorryforthem.
theirelasticityofdemandformovieticketsishigher.
YourAnswer: theirelasticityofdemandformovieticketsishigher.
YourMarks: 1outof1
4)WhatHappensWhenThingsChange?
Anincreaseinamonopoly'sfixedcostswouldcauseitsoutputto
staythesame.
fall.
impossibletopredict.
rise.
YourAnswer: staythesame.
YourMarks: 1outof1
5)Assumethatonefirminaperfectlycompetitivemarketadoptsatechnologicalinnovation
thatenablesittoproduceatalowercostperunitthancompetingfirmsintheshortrun.Which
ofthefollowingstatementsiscorrect?
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Theinnovatingfirmwillearnabovenormalprofitinthelongrun.
Onlynewfirmsenteringtheindustrywithnewtechnologyplantswillbeabletocompete
withtheinnovatingfirm.
Thisisanexampleofadecreasingcostindustry.
Competingfirmswillneedtoadoptthenewtechnologyinthelongruninordertosurvive.
Allthecompetingfirmswillbeforcedtoexitthemarketinthelongrun.
YourAnswer Competingfirmswillneedtoadoptthenewtechnologyinthelongruninorderto
: survive.
YourMarks: 1outof1
6)

Output
1
2
3
4
5
6

Figure92
Total
Revenue
$20
$40
$60
$80
$100
$120

Total
Cost
$40
$60
$70
$80
$85
$110

Figure92showsthetotalrevenueandtotalcostdataforaperfectlycompetitivefirm.To
maximizeprofits,howmanyunitsofoutputshoulditproduce?
6
5
1
3
4
YourAnswer: 5
YourMarks: 1outof1

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7)

Figure911illustratesthelongrunaveragetotalcostcurveforaperfectlycompetitivefirm
andtheshortrunaveragetotalcostcurve(ATC*)forthefirm'scurrentplantsize.Inthelong
run,this
firmwillbeabletostayinoperationwiththesameplantsize
firmwillearnaneconomicprofit
firm'splantsizeistoolargetoallowittoearnanormalprofit
firmwillsufferaneconomicloss
firm'splantsizeistoosmalltoallowittoearnanormalprofit
YourAnswer: firm'splantsizeistoolargetoallowittoearnanormalprofit
YourMarks: 1outof1

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8)

Figure104depictsamonopolythatdoesnotpricediscriminate.Whataretheequilibrium
priceandoutput?
PandQ'
P'andQ'
thereisnoequilibriumundermonopoly
PandQ
P'andQ
YourAnswer: P'andQ'
YourMarks: 1outof1

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9)

TheAlltheRagemicrobreweryisrepresentedinFigure99.Ifthemarketpriceis$2.50per
pint,thenintheshortrun,themicrobrewerywill
earnthesameprofitbyproducingzeropintsasbyproducing50pintsperday
producebetweenzeroand50pintsperday
producezeropintsperdaytoavoidaneconomicloss
produce50pintsperdayandbreakeven
producemorethan50pintsperday
YourAnswer: earnthesameprofitbyproducingzeropintsasbyproducing50pintsperday
YourMarks: 1outof1
10)Tommy'sTiresoperatesinaperfectlycompetitivemarket.Ifthemarketpriceequals$50
pertireandATC=$60pertireattheprofitmaximizinglevelofoutput,theninthelongrun
averagetotalcostswillrise
themarketsupplycurvewillshifttotheright
morefirmswillenterthemarket
theequilibriumpricepertirewillfall
themarketsupplycurvewillshifttotheleft
YourAnswer: themarketsupplycurvewillshifttotheleft
YourMarks: 1outof1

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