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Microeconomics Exercises: Monopoly, Perfect Competition, and Marginal Product - Prof. John, Study Guides, Projects, Research of Economics

Indiana University Bloomington (IU)Economics
Prof. John Johnson

A series of exercises covering key concepts in microeconomics, including monopoly, perfect competition, marginal product, and cost analysis. It provides a comprehensive set of questions and answers that can be used for self-study or classroom practice. The exercises are designed to reinforce understanding of fundamental economic principles and their application in real-world scenarios.

Typology: Study Guides, Projects, Research

2022/2023

Uploaded on 12/18/2024

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Quantity Variable Costs Total
Revenue
15 10
27 18
3 10 21
414 24
519 25
6 25 24
732 21
8 40 18
Table: Quantities with corresponding total costs and prices for a monopoly firm.
1. Table: Quantities with corresponding variable costs and total revenue for a monopoly
firm. If the monopoly represented in the table above has $3 in fixed costs and uses our
rules from class what price will they decide to charge?
A) $0
B) $7
C) $8
D) $21
2. Table: Quantities with corresponding variable costs and total revenue for a monopoly
firm.If the monopoly represented in the table above has $3 in fixed costs, what is the
marginal cost of the 6th unit of production?
A) $3
B) $6
C) $7
D) $25
3. Table: Quantities with corresponding variable costs and total revenue for a monopoly
firm. At which of the following quantities is demand elastic
A) 2
B) 6
C) 7
D) 8
pf3
pf4
pf5
pf8

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Download Microeconomics Exercises: Monopoly, Perfect Competition, and Marginal Product - Prof. John and more Study Guides, Projects, Research Economics in PDF only on Docsity!

Quantity Variable Costs Total Revenue 1 5 10 (^2 7 ) 3 10 21 4 14 24 5 19 25 6 25 24 7 32 21 8 40 18 Table: Quantities with corresponding total costs and prices for a monopoly firm.

  1. Table: Quantities with corresponding variable costs and total revenue for a monopoly firm. If the monopoly represented in the table above has $3 in fixed costs and uses our rules from class what price will they decide to charge? A) $ B) $ C) $ D) $
  2. Table: Quantities with corresponding variable costs and total revenue for a monopoly firm. If the monopoly represented in the table above has $3 in fixed costs, what is the marginal cost of the 6th^ unit of production? A) $ B) $ C) $ D) $
  3. Table: Quantities with corresponding variable costs and total revenue for a monopoly firm. At which of the following quantities is demand elastic A) 2 B) 6 C) 7 D) 8

Q TR

Table: Quantities and Total Revenues

  1. Table: Quantities and Total Revenues: If the values in the table represent a firm’s total revenue which corresponds to selling different possible quantities, marginal revenue for this firm is: A) Increasing B) Decreasing C) Constant D) Not solvable from the information given
  2. If profits are negative firms will ____ the market if profits are positive firms will____ A) enter:enter B) enter:exit C) exit:exit D) exit:enter
  3. When should a firm shut down in the short run and exit in the long run? A) If Price is below ATC and above AVC B) If Price is below ATC and below AVC C) If Price is below AVC and above ATC D) If Price is above ATC and AVC Move C Move D Move A $1000, $1000 $200, $ Move B $1500, $200 $400, $ Bimatrix: Payoff bimatrix for 2 players.
  4. Bimatrix: Payoff bimatrix for 2 players. Using the Bimatrix above, what payoffs represent a Nash Equilibrium in this game? A) $1000, $ B) $200, $ C) $1500, $ D) $400, $
  1. Which of the following is true for both perfectly competitive firms and monopolies A) MR=P B) AR=P C) MR<P D) AR<P
  2. Ceteris Paribus, if the marginal product of labor is increasing, a firm will face ______ marginal costs, and if the marginal product of labor is decreasing a firm will face_____ marginal costs. A) increasing:increasing B) increasing:decreasing C) decreasing:decreasing D) decreasing:increasing
  3. A firm in a _________ market has no power to alter their prices A) Perfectly competitive B) Monopolistic C) Oligopolistic D) Monogolistic Quantity Total Costs 0 10 1 20 2 35 3 55 4 80 5 110 Table: Quantities and total costs for a perfectly competitive firm.
  4. Table: Quantities and total costs for a perfectly competitive firm. If the costs above represent a perfectly competitive firm and the market price for the good the firm produces is $20, using rules from class, how many units of output would a profit maximizing firm produce. A) 0 B) 1 C) 2 D) 3
  1. Economists like perfect price discrimination because A) It helps monopolies make more profits B) It decreases deadweight losses C) They are crazy D) It increases consumer surplus
    1. In the long run a monopoly will produce at a quantity where A) Average total costs are minimized B) Marginal revenue equals marginal cost C) Marginal revenue equals price D) Price equals average total costs
    2. The Marginal Cost Curve must cross A) Only average total costs at their minimum B) Only average fixed costs at their minimum C) Only average variable costs at their minimum D) Average variable costs and average total costs at their minimum

Solutions:

  1. B
  2. B
  3. A
  4. C
  5. D
  6. B
  7. D
  8. A
  9. A
  10. B
  11. D
  12. A
  13. D
  14. B
  15. B
  16. D
  17. B
  18. C
  19. A
  20. A