 Show Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015‐16 Spring Semester ECON101 ‐ Introduction to Economics I Final Exam Answer Key 2June2016 Duration: 100 minutes Name:_________________________ StudentID:_____________________ GroupNo:______________________ Part A: Multiple Choice Questions (2 points each, total 60 points) Please mark your answers on both the exam paper and the optic sheet. 1.WhichofthefollowingisNOTacharacteristicofaperfectlycompetitivemarket? a.Firmsarepricetakers.b.Firmshavedifficultyenteringthemarket. c.Therearemanysellersinthemarket.d.Goodsofferedforsalearelargelythesame. 2.Whichofthefollowingstatementsbestreflectsapricetakingfirm? a.Ifthefirmweretochargemorethanthegoingprice,itwouldsellnoneofitsgoods. b.Thefirmhasanincentivetochargelessthanthemarketpricetoearnhigherrevenue. c.Thefirmcansellonlyalimitedamountofoutputatthemarketpricebeforethemarketpricewillfall. d.Pricetakingfirmsmaximizeprofitsbychargingapriceabovemarginalcost. 3.Supposeafirminacompetitivemarketreducesitsoutputby20percent.Asaresult,thepriceofitsoutputislikelyto a.Increase.b.remainunchanged. c.decreasebylessthan20percent.d.decreasebymorethan20percent. Table142 Thetablerepresentsademandcurvefacedbyafirminacompetitivemarket. 4.RefertoTable142.Forthisfirm,theaveragerevenuefromselling3unitsis a.$12.b.$4.c.$3.d.$1. 5.RefertoTable142.Forthisfirm,themarginalrevenuefromsellingthe3rdunitis a.$12.b.$4.c.$3.d.$1. 6.Attheprofitmaximizinglevelofoutput, a.marginalrevenueequalsaveragetotalcost. b.marginalrevenueequalsaveragevariablecost. c.marginalrevenueequalsmarginalcost.d.averagerevenueequalsaveragetotalcost. 1469.Refer to Figure 14-5. When market price is P5, a profit-maximizing firm's profits can be represented by the area:... Get answer to your question and much more 70.Refer to Figure 14-5. Firms would be encouraged to enter this market for all prices that exceed:... Get answer to your question and much more 71.Suppose that a perfectly competitive firm is selling its output for $10 per unit and it is maximizing its profit. Now theprice rises to $14, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higherprice. Once the firm has adjusted, which of the following statements is correct? Get answer to your question and much more 72.In a market with 1,000 identical firms, the short-run marketsupply is the:a.marginal cost curve (above average variable cost) for a typical firm in the market.b.quantity supplied by the typical firm at a given price in the market.c.sum of the prices charged by each of the 1,000 individual firms.d.sum of the quantities supplied at a given price by each of the 1,000 individual firms.D 73When new firms have an incentive to enter a competitive market, their entry will: Get answer to your question and much more 74.Assuming an equilibrium situation, a monopoly's marginal cost will: Get answer to your question and much more 75.A fundamental source of monopoly market power arises from: Get answer to your question and much more Introduction to microeconomics (eco1104)Final exam/ Fall 2006 Which segment represents the short run supply curve?The firm's short‐run supply curve is the portion of its marginal cost curve that lies above its average variable cost curve. As the market price rises, the firm will supply more of its product, in accordance with the law of supply.
What line segment best reflects the long run supply curve for this firm?Cards
When market price is at P4 a profit maximizing firm will produce what level of output?When market price is at P4, a profit-maximizing firm will produce what level of output? experiences a zero profit.
Which of the following does monopoly share in common with the perfectly competitive firm?Which of the following does the monopoly share in common with the perfectly-competitive firm? A. They both maximize profits by producing a quantity for which marginal revenue equals marginal cost.
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Refer to figure 14-8. which line segment best reflects the short-run supply curve for this firm?
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