1. If P = $1,000 - $2Q: MR = $1,000Q - $4. MR = $1,000 - $8Q. poop MR = $1,000 - $4Q. MR = $250 - $0.25P. 2. Total cost minimization occurs at the point where: a. Q = 0. b. MC = AC. C . AC = 0. MC = 0. 3. Average cost minimization occurs at the point where: a. MC = AC. b . MC = 0. C. AC = 0. Q =0. 4. When the product demand curve is Q = 140 - 10P, and price is decreased from P1 = $10 to P2 = $9, the arc price elasticity of demand is: a. -10 b. -3 -2.1 5. If the point price elasticity of demand equals -2 and the marginal cost per unit is $10, the optimal price is: a. $5 b. $10 C . $20 impossible to determine without further information. 6. When the cross-price elasticity & px = -3 : a. demand rises by 3% with a 1% increase in the price of X. b . the quantity demanded decreases by 3% with a 1% increase in the price of X. C. the quantity demanded rises by 1% with a 3% increase in the price of X. d. demand decreases by 3% with a 1% increase in the price of X.If e P = '3 and MC = $0.44, the prot-maximizing price is: $0.99 $0.66 $1.98 8. When the product demand curve is P = $5 - $0.05Q, and Q = 6|], the point price elasticity of demand is: a. -2f3 b. -3f2 c. -8f3 d. -3f8 Use the following table to answer the next question. The yretown Yokels ice hockey team is the only live sports entertainment in _I_J_re_tow_n. Ticket Price Total Attendance Total Revenue Marginal Revenue 514 100 51400 $12 200 32400 $10 $10 300 $3000 '56 $8 400 $3200 52 $6 500 $3000 4.52 $4 600 $2400 -$6 9. At a price of $8 per ticket, the Yokels attract 4m) spectators. For the Yokels to attract Slit} spectators, they would have to price. Total revenue would a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease 10. The production function Q = 0.25M\" Y"-5 exhibits: constant returns to scale. increasing returns to scale. increasing and then diminishing returns to scale. diminishing returns to scale. 9-957!\" 22. A 100% markup on cost is equivalent to a markup on price of: 25% 33% 50% 100% 23. 25% 33% 50% 100% 24. 100% 67% 50% 33% 25. 100% 67% 50% 33% A 25% markup on price is equivalent to a markup on cost: of: When Ep = -3, the optimal markup on cost is: When Ep = -2, the optimal markup on price is: Use the following table to answer the next question Quantity Total of output cost 0 $ 5 D 10 85 20 150 30 220 40 305 50 455 26. If the market price is $8.50, what are the profit-maximizing output and prot? a} output = 40; prot = $35 13) output = 40; prot = $0 c) output = O; prot = -$5l} d) output and prot cannot be determined because marginal revenue cannot be calculated 27. If a rm charges a price of $6 for a product with a cost of $5, the markup on cost equals: a} 63% b) 33% c] 20% d) 50% 3?. Refer to the gure below. To maximize prot, what price should the firm charge? a. $18; b. $15; c. $8; (1. $4 11 E . : % $1 2 _________ 4": ATC D I I $ 4 __________ . 33' Demand 0 600 900 Units of output. Q 38. Refer to the figure below. The firm in question exhibits economies of scale: LRAC MC SRATC MC SRATC MC SRATC Cost per unit ($) 0 Quantity a. Along the decreasing portion of the long-run average cost curve (LRAC), up until Co. 12 b. Along the increasing portion of the long-run average cost curve (LRAC), after Co. C . At Co, where LRAC is minimum. d. Anywhere along the LRAC, as long as increasing the scale of operations does not affect cost per unit. Use the following table, which provides long-run information about the market for apples, to answer the next two questions. Price is price per pound of apples. Quantity Price Marginal Marginal Average pounds) per Pound Revenue Cost Total Cost 100 $1.40 $2.00 200 $1.07 $0.74 $0.50 $1.50 300 $0.92 $0.62 $0.46 $0.75 400 $0.80 $0.44 $0.44 $0.70 500 $0.66 $0.10 $0.43 $0.65 600 $0.50 - $0.30 $0.50 $0.50 700 $0.30 - $0.80 $0.59 $1.00 39. Given the cost information above, a monopoly would charge a price of per pound and produce pounds of apples. (a) $0.80; 400 (b) $0.44; 400 (c ) $0.50; 600 (d) $0.30; 600 40. Given the cost information above, a perfectly competitive industry would charge a price of per pound and produce pounds of apples. (a) $0.80; 400 (b) $0.44; 400 $0.50; 600 (d) $0.30; 600