1. "The introduction of a price control on a monopolist set below the monopoly price but above the competitive price will lead the monopolist to produce more output and will typically increase the monopolist's revenues unless the price is set well below the monopoly price."

A True

B False

2. "If the expected lifetime earnings ofentrepreneursis less than the expected lifetime earnings of workers with comparable education and experience, then entrepreneurs must be risk loving."

ATrue

BFalse

3. Select all of the answers that aretrue.That is, there may be more than one correct statement.

Which of the following will always result in deadweight loss?

A Price floor

B Price ceiling

C A monopolistic industry

D Incomplete information

E Opportunity costs

4. Please select the one incorrect statement below.

In the long run, a monopolist will...

A Produce until MR = MC

B Not maximize social surplus

C Face a downward sloping MR curve

D Not face a market demand curve

E Earn positive economic profits

5. For this question,please select every statement that is true.

In the long run of a perfectly competitive market...

A Economic profits are zero

B Deadweight loss is zero

C Market price is constant

D Market demand is perfectly elastic

E Market supply is perfectly elastic

F Average fixed costs of each producerare minimized

6. In 2005Uber and Lyfthad not entered the market yet and theNew York City taxi cab commission could set prices andrestrict entry into the market for taxi cab rides. New York City taxi cabs provided 100 rides in 2005. For simplicity, suppose every taxi cab ride was identical. Each ride lasted 10 miles and the price of each ride was $50. At this price, the price elasticity of demand was -5.0.

Taxi drivers in this market faced three costs. First was the cost of the medallionthat allowed the taxi driver to operate in New York City. Second was the cost of purchasing a yellow Ford Crown Vic taxi cab. Third was the cost of gasoline, which was $2 per gallon at the time. The Ford Crown Vic could travel 20 miles for each gallon of gasoline.

If the New York City taxi cab commission's objective were to maximize economic profits, what price should they charge for each ride?

A.$101.00

B.$50.50

C.$45.00

D.$30.50

E.$25.00