11. When Px = $60, MPx = 2 and MPy = 2, relative employment levels are optimal provided: a. Py = 16.74. b. PY = $24. C. PY = $60. Py = $150. 12. When Px = $100, MPx = 20 and MRo = $5, the marginal revenue product of X equals: a. $100. b. $50. C. $10. $5. 13. If total product for each of five units of labor is 10, 16, 20, 30, and 34, respectively, the marginal product of the third unit is a) 20 b) 10 c) 4 d) 0 14. If P = $8 and MC =$5 + Q, the competitive firm's profit-maximizing level of output is: a) 3 b) 0.2 c) 8 d) 1515. If fixed cost at Q = 100 is $130, then 4 a) fixed cost at Q = 0 is $0 b) fixed cost at Q = 0 is less than $130 c) fixed cost at Q = 200 is $260 d) fixed cost at Q = 200 is $130 16. If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost of the twentieth unit a) is $100 b) is $5 c) is $40 d) is $8 17. Suppose Guild produces 5,000 guitars per year. Its average total cost is $90, and its fixed cost is $250,000. What is its variable cost? a) $250,000 b) $450,000 c) $25,000 d) $200,00018. If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the value of price elasticity of demand is a) -1/3 b) -2 1/3 c) -1/4 d) -3 19. So long as P> AVC, the competitive firm's short-run supply curve is equal to: a) AVC b) MC c) P d) none of these. 20. At the profit maximizing level of output for a monopolist: a) P = AR and AR = AC b) P > MC and MR = MC c) P = MC and MR > MC d) P = MR and AC = MC 21. Holding supply conditions constant, the costs of regulation fall wholly on producers when: a) Ep = 1 b) Ep => 1 C) EP = 00 d) Ep = 028. If a firm charges a price of $5 for a product with a cost of $3, the markup on price equals: 8 a) 60% b) 150% c) 250% d) 40% 29. If the optimal markup on price is 50%, the optimal markup on cost is: a) 100% b) 75% c) 50% d) 25% 30. If the optimal markup on cost is 25%, the optimal markup on price is: a) 20% b) 25% c) 50% d) 100% 31. The competitive market pricing rule-of-thumb for profit maximization is to set: a) MR > MC b) MR = MC c) P = MC/[1 + (1/EP)] d) MC = MR/[1 + (1/EP)]32. What is the Herfindabl-Hirschman Index (HHI) for an industry in which five firms each control 20% of the market? a. 20; b. 100; C. 2,000; d. 5,000 9 33. Which of the following pieces of antitrust legislation banned tying contracts, limited mergers, and banned price discrimination? a. The Sherman Act. b. The Wheeler-Lea Act. C. The Clayton Act. d. The same legislation that created the Interstate Commerce Commission (ICC). 34. Refer to the figure below. How much profit does the profit-maximizing monopoly earn? MC ATC Dollars ($) $10.00 8.40 $4.00 - Demand 600 MR Units of output, Q a. $0; b. $6,000; C. $5,040; d. $10; e. $96035. Refer to the figure below. From the structure of cost and revenue of the firm, we would predict that this monopoly will: a. Shut down in the short run, and go out of business in the long run. b. Shut down in the short run, but continue to operate in the long run. C. Operate in the short run, but go out of business in the long run. d. Operate 10 ATC MC AVC Dollars ($) Demand MR Units of output, Q 36. Refer to the figure below. How much is consumer surplus in the monopoly outcome? a. Area C; b. Area R; c. Area D; d. Area C + D; e. Area C + R + D C $18.00 Dollars ($) R D $8.00 MC = AC Demand 200 400 MR Units of output