Question 1

In Problem 8,the supply curve of any firm is Si(p)=p/2.If a firm produces 2 units of output,what are its total variable costs?

Accepted Answer

A)  $8 
B)  $6 
C)  $2 
D)  $4 
E)  There is not enough information given to determine total variable costs. 
A)  $8 
B)  $6 
C)  $2 
D)  $4 
E)  There is not enough information given to determine total variable costs.

Question 2

Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described in Problem 1.Suppose,as in Problem 2,that it was discovered to everyone's surprise on January 1,1993,after it was too late to change orders for gnome molds,that the cost of the plaster and labor needed to make a gnome had changed to $9.If the demand curve does not change,what will happen to the equilibrium price of gnomes?

Accepted Answer

A)  Stays constant. 
B)  Rises by $2. 
C)  Falls by $2. 
D)  Rises by $9. 
E)  Falls by $4.50. 
A)  Stays constant. 
B)  Rises by $2. 
C)  Falls by $2. 
D)  Rises by $9. 
E)  Falls by $4.50.

Question 3

Suppose that the garden gnome industry was in long-run equilibrium as described in Problem 1.On January 1,1993,the cost of plaster and labor remained at $7 per gnome,gnome molds still cost $1,000,and the interest rate remained at 10%,but the government introduced a tax of $8 on every garden gnome sold.Then the equilibrium price of garden gnomes in 1993 would be

Accepted Answer

A)  $17. 
B)  $8. 
C)  $9.20. 
D)  $15. 
E)  $23. 
A)  $17. 
B)  $8. 
C)  $9.20. 
D)  $15. 
E)  $23.

Question 4

In Problem 1,if the cost of plaster and labor were $5 per gnome and everything else is as in the problem (gnome molds cost $1,000,interest rate is 10%),what is the lowest price of gnomes at which there would be a positive supply in the long run?

Accepted Answer

A)  $5 
B)  $10 
C)  $7.20 
D)  $5.50 
E)  $6 
A)  $5 
B)  $10 
C)  $7.20 
D)  $5.50 
E)  $6

Question 5

In Problem 13,in the absence of government interference,there is a constant marginal cost of $5 per ounce for growing marijuana and delivering it to buyers.If the probability that any shipment of marijuana seized is .50 and the fine if a shipper caught is $40 per ounce,then the equilibrium price of marijuana per ounce is

Accepted Answer

A)  $50. 
B)  $45. 
C)  $2.50. 
D)  $25. 
E)  $7.50. 
A)  $50. 
B)  $45. 
C)  $2.50. 
D)  $25. 
E)  $7.50.

Question 6

Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described in Problem 1.Suppose,as in Problem 2,that it was discovered to everyone's surprise on January 1,1993,after it was too late to change orders for gnome molds,that the cost of the plaster and labor needed to make a gnome had changed to $6.If the demand curve does not change,what will happen to the equilibrium price of gnomes?

Accepted Answer

A)  Rises by $6. 
B)  Rises by $1. 
C)  Stays constant. 
D)  Falls by $1. 
E)  Falls by $3. 
A)  Rises by $6. 
B)  Rises by $1. 
C)  Stays constant. 
D)  Falls by $1. 
E)  Falls by $3.

Question 7

In Problem 9,if the demand curve for pollicles is negatively sloped and the government imposes a tax t on every unit of output sold by the industry,in the long run

Accepted Answer

A)  fewer pollicles will be sold. 
B)  more pollicles will be sold. 
C)  each firm in the industry produces more pollicles. 
D)  each firm in the industry produces fewer pollicles. 
E)  the same number of pollicles will be sold. 
A)  fewer pollicles will be sold. 
B)  more pollicles will be sold. 
C)  each firm in the industry produces more pollicles. 
D)  each firm in the industry produces fewer pollicles. 
E)  the same number of pollicles will be sold.

Question 8

In Problem 13,in the absence of government interference,there is a constant marginal cost of $5 per ounce for growing marijuana and delivering it to buyers.If the probability that any shipment of marijuana seized is .10 and the fine if a shipper caught is $20 per ounce,then the equilibrium price of marijuana per ounce is

Accepted Answer

A)  $25. 
B)  $4.50. 
C)  $7.78. 
D)  $7. 
E)  $5.50. 
A)  $25. 
B)  $4.50. 
C)  $7.78. 
D)  $7. 
E)  $5.50.

Question 9

Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described in Problem 1.Suppose,as in Problem 2,that it was discovered to everyone's surprise on January 1,1993,after it was too late to change orders for gnome molds,that the cost of the plaster and labor needed to make a gnome had changed to $6.If the demand curve does not change,what will happen to the equilibrium price of gnomes?

Accepted Answer

A)  Stays constant. 
B)  Falls by $1. 
C)  Rises by $6. 
D)  Rises by $1. 
E)  Falls by $3. 
A)  Stays constant. 
B)  Falls by $1. 
C)  Rises by $6. 
D)  Rises by $1. 
E)  Falls by $3.

Question 10

Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described in Problem 1.Suppose,as in Problem 2,that it was discovered to everyone's surprise on January 1,1993,after it was too late to change orders for gnome molds,that the cost of the plaster and labor needed to make a gnome had changed to $8.If the demand curve does not change,what will happen to the equilibrium price of gnomes?

Accepted Answer

A)  Rises by $1. 
B)  Falls by $1. 
C)  Stays constant. 
D)  Rises by $8. 
E)  Falls by $4. 
A)  Rises by $1. 
B)  Falls by $1. 
C)  Stays constant. 
D)  Rises by $8. 
E)  Falls by $4.

Question 11

Suppose that the garden gnome industry was in long-run equilibrium as described in Problem 1.On January 1,1993,the cost of plaster and labor remained at $7 per gnome,gnome molds still cost $1,000,and the interest rate remained at 10%,but the government introduced a tax of $9 on every garden gnome sold.Then the equilibrium price of garden gnomes in 1993 would be

Accepted Answer

A)  $16. 
B)  $9. 
C)  $18. 
D)  $9.20. 
E)  $25. 
A)  $16. 
B)  $9. 
C)  $18. 
D)  $9.20. 
E)  $25.

Question 12

In Problem 1,if the cost of plaster and labor were $10 per gnome and everything else is as in the problem (gnome molds cost $1,000,interest rate is 10%),what is the lowest price of gnomes at which there would be a positive supply in the long run?

Accepted Answer

A)  $10 
B)  $11 
C)  $20 
D)  $12.20 
E)  $12 
A)  $10 
B)  $11 
C)  $20 
D)  $12.20 
E)  $12

Question 13

Suppose that the garden gnome industry was in long-run equilibrium as described in Problem 1.On January 1,1993,the cost of plaster and labor remained at $7 per gnome,gnome molds still cost $1,000,and the interest rate remained at 10%,but the government introduced a tax of $4 on every garden gnome sold.Then the equilibrium price of garden gnomes in 1993 would be

Accepted Answer

A)  $13. 
B)  $4. 
C)  $9.20. 
D)  $11. 
E)  $15. 
A)  $13. 
B)  $4. 
C)  $9.20. 
D)  $11. 
E)  $15.

Exam 24: Industry Supply-Part B

In Problem 8,the supply curve of any firm is Si(p)=p/2.If a firm produces 2 units of output,what are its total variable costs?

In Problem 1,if the cost of plaster and labor were $5 per gnome and everything else is as in the problem (gnome molds cost $1,000,interest rate is 10%),what is the lowest price of gnomes at which there would be a positive supply in the long run?

In Problem 9,if the demand curve for pollicles is negatively sloped and the government imposes a tax t on every unit of output sold by the industry,in the long run

In Problem 1,if the cost of plaster and labor were $10 per gnome and everything else is as in the problem (gnome molds cost $1,000,interest rate is 10%),what is the lowest price of gnomes at which there would be a positive supply in the long run?

Demand-Part A

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

Monopoly-Part A

Monopoly-Part B

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-Part A

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

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

In Problem 8,the supply curve of any firm is S_i(p)=p/2.If a firm produces 2 units of output,what are its total variable costs?