1. Which of the following is true for a monopoly firm?

A. The marginal revenue curve is the same as the average revenue curve.

B. The demand curve is a declining average revenue curve.

C. The demand curve, average revenue curve, and marginal revenue curve are the same.

D. The total revenue curve is the same as the demand curve.

2. The markup of price over marginal cost for a monopolist is _____.

A. Independent of the price elasticity of demand

B. Inversely related to the price elasticity of demand

C. The same as the price elasticity of demand

D. The same as the price elasticity of supply

3. Assume that you have a certain industry given. Now consider that you are the central planner who can determine the number of companies and the way in which they are competing with each other. In which situation are the profits for the most profitable company the smallest?

A. Oligopoly la Cournot

B. Duopoly la Cournot

C. Monopoly

D. Leader-Follower Duopoly (Duopoly la Stackelberg)

4. Which of the following is not an example of price discrimination?

A. A restaurant sets a fixed cover charge in addition to menu charges.

B. A phone company charges different rates to residential and business users.

C. An electric company charges different rates to senior citizens and younger adults.

D. An airline sets different fares for adults and children.

5.A fixed cost:

A. does not change with the level of the firm's output.

B. is associated with the firm's variable inputs.

C. decreases as the firm increases output.

D. captures the wear and tear of using capital in production.

6. When the marginal and average products of labor are equal:

A. marginal product must be at its maximum.

B. marginal product must be at a minimum.

C. average product must be at its maximum.

D. average product must be increasing.

7. Sally Doe has her own law practice. She pays $1,500 in rent for her offices per month. She also pays $4,000 a month in salaries to secretaries and staff, utility bills worth $500 a month, and miscellaneous bills worth $1,000 a month. She recently received an offer to work for a legal firm for $8,000 a month, but she declined that in order to run her own practice. Which of the following most completely describes the cost Jane incurs per month to run her own practice?

A. $15,000

B. $7,000

C. $5,500

D. $6,000

8.Which of the following is not an assumption we are relying on to analyze a competitive market?

A. Decreasing Costs when production increases

B. Products are perceived as homogenous

C. Free Entrance and Exit

D. A large number of sellers and buyers meet on the market

9. You are observing a market. Which of the following observations would indicate beyond any doubt that the market does not fulfill all conditions for perfect competition?

A. You observe that companies report profits in their yearly reports.

B. One company bankrupted in the last year

C. Three companies joined the market in the last year

D. Every time when the CEOs of the companies active in the market meet each other, you can observe a change in prices.

10. When economists are claiming that companies are maximizing their profits, what do they mean?

A. Companies are maximizing the difference between total revenue and total cost

B. Companies are minimizing total cost.

C. Companies are maximizing total output

D. Companies are maximizing the difference between average revenue and the average cost

11. A consumer hasU=X^0.5 Y ^0.5 for a utility function, withMUx= 0.5X^-0.5 Y ^0.5 andMUy= 0.5X^0.5Y^-0.5. If she has an income of $100, the price ofXis $5, and the price ofYis $10, what are the utility-maximizing quantities of X and Y?

12. Ney Inc. and ARN Parts are the only two producers of bulldozer bucket teeth. The owners of the two firms conspire to charge a monopoly price, with each firm serving half the market. The market inverse demand curve isP= 1,000 -10Q whereQmeasures the daily number of sets of bulldozer bucket teeth andPis the price per set. The marginal cost of production for either firm is constant at $200.

A.How much output does each producer produce?

B. What is the market price per set?

C.If fixed costs are zero, what is each firm's profit?