Question 1.Suppose market demand and supply are given by Qd =

05 Jun Question 1.Suppose market demand and supply are given by Qd =

Question
1.Suppose market demand and supply are given by Qd = 300 – 4P and QS = -50 + 3P. The equilibrium quantity is:
100.

80.

115.

120.

2.Other things held constant, the higher the price of a good

the lower the producer surplus.

the greater the producer surplus.

the higher the supply.

the lower the supply.

3.A firm has a marginal cost of $200 and charges a price of $500. The Lerner index for this firm is:
rev: 11_07_2013_QC_39365

0.20.

0.50.

1.50.

0.60.

4. You are the manager of a Mom and Pop store that can buy milk from a supplier at $3.00 per gallon. If you believe the elasticity of demand for milk by customers at your store is ?4, then your profit-maximizing price is:

$2.00.

$2.50.

$4.00.

$5.00.

5.A monopoly producing a chip at a marginal cost of $6 per unit faces a demand elasticity of ?2.5. Which price should it charge to optimize its profits?

$6 per unit

$8 per unit

$10 per unit

$12 per unit

6.The following provides information for a one-shot game.

Picture

What are secure strategies for firm A and firm B respectively?

(low price, low price)

(high price, low price)

(high price, high price)

Neither firm has a secure strategy.

7.The figure below presents information for a one-shot game.

Picture

7.Picture

What are dominant strategies for firm A and firm B respectively?

(low price, high price)

(high price, low price)

(high price, high price)

(low price, low price)

8.Which of the following is NOT an incentive scheme to ensure that workers do a good job?

Paying waitresses low wages, but allowing them to collect tips

Profit-sharing plans in large companies

Commission pay schedules for salesmen

Straight hourly wages for dock workers

9.The additional benefits that arise by using an additional unit of the managerial control variable is defined as the:

total benefit.

opportunity cost.

marginal benefit.

present value of benefits.

10.Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. The equilibrium quantity is:

92.

81.

45.

62.

11.The purpose of randomized pricing is to reduce:

consumer price information only.

competitor price information only.

both customer and competitor information about price.

the firm’s pricing inflexibility.

12.Which of the following statements is NOT correct about monopoly?

A monopolist generally faces a downward-sloping demand curve.

Monopolists always make positive profits in the long run.

A monopoly may make negative profits in the short run.

There is no close substitute for a monopoly’s product.