Question 1

if there are no fixed costs and marginal cost is constant at $24, the price elasticity of demand at the profit-maximizing level of output is closest to

Accepted Answer

A) -1.63. 
B) -0.61. 
C) -3.26. 
D) -6.53. 
E) -0.31. 
A) -1.63. 
B) -0.61. 
C) -3.26. 
D) -6.53. 
E) -0.31. A

Question 2

The demand for Professor Bongmore's new book is given by the function Q = 8,000 - 100p.If the cost of having the book edited and typeset is $7,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

Accepted Answer

A) having it edited and typeset and selling 4,000 copies. 
B) not having it edited and typeset and not selling any copies. 
C) having it edited and typeset and selling 3,800 copies. 
D) having it edited and typeset and selling 7,600 copies. 
E) having it typeset and selling 1,900 copies. 
A) having it edited and typeset and selling 4,000 copies. 
B) not having it edited and typeset and not selling any copies. 
C) having it edited and typeset and selling 3,800 copies. 
D) having it edited and typeset and selling 7,600 copies. 
E) having it typeset and selling 1,900 copies. C

Question 3

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y)= 30 - y and its total costs are c(y)= 6y, where prices and costs are measured in dollars.In the past it was not taxed, but now it must pay a tax of 2 dollars per unit of output.After the tax, the monopoly will

Accepted Answer

A) increase its price by 2 dollars. 
B) increase its price by 3 dollars. 
C) increase its price by 1 dollar. 
D) leave its price constant. 
E) None of the above. 
A) increase its price by 2 dollars. 
B) increase its price by 3 dollars. 
C) increase its price by 1 dollar. 
D) leave its price constant. 
E) None of the above. C

Question 4

if the demand for pigeon pies is given by p(y)= 110 - y/3, then the level of output that will maximize Peter's profit is

Accepted Answer

A) 169. 
B) 33. 
C) 330. 
D) 495. 
E) None of the above. 
A) 169. 
B) 33. 
C) 330. 
D) 495. 
E) None of the above.

Question 5

if demand for the book is Q = 2,000 - 300p, the marginal revenue function is given by

Accepted Answer

A) 300. 
B) 6.67 - Q/150. 
C) 2,000 - 600. 
D) 6.67Q - Q2/300. 
E) -1/300. 
A) 300. 
B) 6.67 - Q/150. 
C) 2,000 - 600. 
D) 6.67Q - Q2/300. 
E) -1/300.

Question 6

A firm has invented a new beverage called Slops.It doesn't taste very good, but it gives people a craving for Lawrence Welk's music and Professor Johnson's jokes.Some people are willing to pay money for this effect, so the demand for Slops is given by the equation q = 20 - p.Slops can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater.But before any Slops can be produced, the firm must undertake a fixed cost of $105.Since the inventor has a patent on Slops, it can be a monopolist in this new industry.

Accepted Answer

A) The firm will produce 10 units of Slops. 
B) From the point of view of social efficiency, it is best that no Slops be produced. 
C) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $110 and insisting that the firm offer Slops at zero price. 
D) The firm will produce 20 units of Slops. 
E) None of the above. 
A) The firm will produce 10 units of Slops. 
B) From the point of view of social efficiency, it is best that no Slops be produced. 
C) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $110 and insisting that the firm offer Slops at zero price. 
D) The firm will produce 20 units of Slops. 
E) None of the above.

Question 7

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y)= 90 - y and its total costs are c(y)= 8y, where prices and costs are measured in dollars.In the past it was not taxed, but now it must pay a tax of 8 dollars per unit of output.After the tax, the monopoly will

Accepted Answer

A) increase its price by 4 dollars. 
B) leave its price constant. 
C) increase its price by 8 dollars. 
D) increase its price by 12 dollars. 
E) None of the above. 
A) increase its price by 4 dollars. 
B) leave its price constant. 
C) increase its price by 8 dollars. 
D) increase its price by 12 dollars. 
E) None of the above.

Question 8

The demand for Professor Bongmore's new book is given by the function Q = 5,000 - 100p.If the cost of having the book edited and typeset is $20,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

Accepted Answer

A) not having it edited and typeset and not selling any copies. 
B) having it edited and typeset and selling 2,300 copies. 
C) having it edited and typeset and selling 2,500 copies. 
D) having it edited and typeset and selling 4,600 copies. 
E) having it typeset and selling 1,150 copies. 
A) not having it edited and typeset and not selling any copies. 
B) having it edited and typeset and selling 2,300 copies. 
C) having it edited and typeset and selling 2,500 copies. 
D) having it edited and typeset and selling 4,600 copies. 
E) having it typeset and selling 1,150 copies.

Question 9

A firm has invented a new beverage called Slops.It doesn't taste very good, but it gives people a craving for Lawrence Welk's music and Professor Johnson's jokes.Some people are willing to pay money for this effect, so the demand for Slops is given by the equation q = 18 - p.Slops can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater.But before any Slops can be produced, the firm must undertake a fixed cost of $86.Since the inventor has a patent on Slops, it can be a monopolist in this new industry.

Accepted Answer

A) The firm will produce 9 units of Slops. 
B) From the point of view of social efficiency, it is best that no Slops be produced. 
C) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $91 and insisting that the firm offer Slops at zero price. 
D) The firm will produce 18 units of Slops. 
E) None of the above. 
A) The firm will produce 9 units of Slops. 
B) From the point of view of social efficiency, it is best that no Slops be produced. 
C) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $91 and insisting that the firm offer Slops at zero price. 
D) The firm will produce 18 units of Slops. 
E) None of the above.

Question 10

if the demand for pigeon pies is given by p(y)= 140 - y/3, then the level of output that will maximize Peter's profit is

Accepted Answer

A) 630. 
B) 214. 
C) 420. 
D) 42. 
E) None of the above. 
A) 630. 
B) 214. 
C) 420. 
D) 42. 
E) None of the above.

Question 11

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y)= 50 - y and its total costs are c(y)= 10y, where prices and costs are measured in dollars.In the past it was not taxed, but now it must pay a tax of 2 dollars per unit of output.After the tax, the monopoly will

Accepted Answer

A) leave its price constant. 
B) increase its price by 2 dollars. 
C) increase its price by 3 dollars. 
D) increase its price by 1 dollar. 
E) None of the above. 
A) leave its price constant. 
B) increase its price by 2 dollars. 
C) increase its price by 3 dollars. 
D) increase its price by 1 dollar. 
E) None of the above.

Question 12

if the demand schedule for Bong's book is Q = 5,000 - 100p, the cost of having the book typeset is $6,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

Accepted Answer

A) not having it typeset and not selling any copies. 
B) having it typeset and selling 4,600 copies. 
C) having it typeset and selling 2,500 copies. 
D) having it typeset and selling 2,300 copies. 
E) having it typeset and selling 1,150 copies. 
A) not having it typeset and not selling any copies. 
B) having it typeset and selling 4,600 copies. 
C) having it typeset and selling 2,500 copies. 
D) having it typeset and selling 2,300 copies. 
E) having it typeset and selling 1,150 copies.

Question 13

The demand for Professor Bongmore's new book is given by the function Q = 6,000 - 100p.If the cost of having the book edited and typeset is $18,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

Accepted Answer

A) having it edited and typeset and selling 2,800 copies. 
B) not having it edited and typeset and not selling any copies. 
C) having it edited and typeset and selling 5,600 copies. 
D) having it edited and typeset and selling 3,000 copies. 
E) having it typeset and selling 1,400 copies. 
A) having it edited and typeset and selling 2,800 copies. 
B) not having it edited and typeset and not selling any copies. 
C) having it edited and typeset and selling 5,600 copies. 
D) having it edited and typeset and selling 3,000 copies. 
E) having it typeset and selling 1,400 copies.

Question 14

if there are no fixed costs and marginal cost is constant at $8, the price elasticity of demand at the profit-maximizing level of output is closest to

Accepted Answer

A) -1.17. 
B) -4.70. 
C) -0.85. 
D) -2.35. 
E) -0.43. 
A) -1.17. 
B) -4.70. 
C) -0.85. 
D) -2.35. 
E) -0.43.

Question 15

if the demand schedule for Bong's book is Q = 3,000 - 100p, the cost of having the book typeset is $9,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

Accepted Answer

A) having it typeset and selling 1,300 copies. 
B) having it typeset and selling 2,600 copies. 
C) having it typeset and selling 1,500 copies. 
D) not having it typeset and not selling any copies. 
E) having it typeset and selling 650 copies. 
A) having it typeset and selling 1,300 copies. 
B) having it typeset and selling 2,600 copies. 
C) having it typeset and selling 1,500 copies. 
D) not having it typeset and not selling any copies. 
E) having it typeset and selling 650 copies.

Question 16

if the demand for pigeon pies is given by p(y)= 50 - y/2, then the level of output that will maximize Peter's profit is

Accepted Answer

A) 100. 
B) 50. 
C) 150. 
D) 10. 
E) None of the above. 
A) 100. 
B) 50. 
C) 150. 
D) 10. 
E) None of the above.

Question 17

if the demand schedule for Bong's book is Q = 3,000 - 100p, the cost of having the book typeset is $10,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

Accepted Answer

A) having it typeset and selling 1,300 copies. 
B) having it typeset and selling 1,500 copies. 
C) having it typeset and selling 2,600 copies. 
D) not having it typeset and not selling any copies. 
E) having it typeset and selling 650 copies. 
A) having it typeset and selling 1,300 copies. 
B) having it typeset and selling 1,500 copies. 
C) having it typeset and selling 2,600 copies. 
D) not having it typeset and not selling any copies. 
E) having it typeset and selling 650 copies.

Question 18

if there are no fixed costs and marginal cost is constant at $44, the price elasticity of demand at the profit-maximizing level of output is closest to

Accepted Answer

A) 20.39. 
B) 25.14. 
C) 22.57. 
D) 210.29. 
E) 20.19. 
A) 20.39. 
B) 25.14. 
C) 22.57. 
D) 210.29. 
E) 20.19.

Question 19

if the demand schedule for Bong's book is Q = 2,000 - 100p, the cost of having the book typeset is $9,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

Accepted Answer

A) having it typeset and selling 1,600 copies. 
B) not having it typeset and not selling any copies. 
C) having it typeset and selling 1,000 copies. 
D) having it typeset and selling 800 copies. 
E) having it typeset and selling 400 copies. 
A) having it typeset and selling 1,600 copies. 
B) not having it typeset and not selling any copies. 
C) having it typeset and selling 1,000 copies. 
D) having it typeset and selling 800 copies. 
E) having it typeset and selling 400 copies.

Question 20

A firm has invented a new beverage called Slops.It doesn't taste very good, but it gives people a craving for Lawrence Welk's music and Professor Johnson's jokes.Some people are willing to pay money for this effect, so the demand for Slops is given by the equation q = 10 - p.Slops can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater.But before any Slops can be produced, the firm must undertake a fixed cost of $30.Since the inventor has a patent on Slops, it can be a monopolist in this new industry.

Accepted Answer

A) The firm will produce 5 units of Slops. 
B) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $35 and insisting that the firm offer Slops at zero price. 
C) From the point of view of social efficiency, it is best that no Slops be produced. 
D) The firm will produce 10 units of Slops. 
E) None of the above. 
A) The firm will produce 5 units of Slops. 
B) A Pareto improvement could be achieved by having the government pay the firm a subsidy of $35 and insisting that the firm offer Slops at zero price. 
C) From the point of view of social efficiency, it is best that no Slops be produced. 
D) The firm will produce 10 units of Slops. 
E) None of the above.

Exam 23: Monopoly-Part B

if there are no fixed costs and marginal cost is constant at $24, the price elasticity of demand at the profit-maximizing level of output is closest to

The demand for Professor Bongmore's new book is given by the function Q = 8,000 - 100p.If the cost of having the book edited and typeset is $7,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

if the demand for pigeon pies is given by p(y)= 110 - y/3, then the level of output that will maximize Peter's profit is

if demand for the book is Q = 2,000 - 300p, the marginal revenue function is given by

The demand for Professor Bongmore's new book is given by the function Q = 5,000 - 100p.If the cost of having the book edited and typeset is $20,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

if the demand for pigeon pies is given by p(y)= 140 - y/3, then the level of output that will maximize Peter's profit is

if the demand schedule for Bong's book is Q = 5,000 - 100p, the cost of having the book typeset is $6,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

The demand for Professor Bongmore's new book is given by the function Q = 6,000 - 100p.If the cost of having the book edited and typeset is $18,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

if there are no fixed costs and marginal cost is constant at $8, the price elasticity of demand at the profit-maximizing level of output is closest to

if the demand schedule for Bong's book is Q = 3,000 - 100p, the cost of having the book typeset is $9,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

if the demand for pigeon pies is given by p(y)= 50 - y/2, then the level of output that will maximize Peter's profit is

if the demand schedule for Bong's book is Q = 3,000 - 100p, the cost of having the book typeset is $10,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

if there are no fixed costs and marginal cost is constant at $44, the price elasticity of demand at the profit-maximizing level of output is closest to

if the demand schedule for Bong's book is Q = 2,000 - 100p, the cost of having the book typeset is $9,000, and the marginal cost of printing an extra book is $4, then he would maximize his profits by

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part A

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A