Course name: Microeconomics

II . Please fill in the blanks to show differences between the market structures. (12 points) Number of Market Price Elasticity Product Excess profits firm power of demand differentiation in long run Perfect competition Monopolistic competition oligopoly Monopoly III. Please answer the following questions. Fully explain your answer, including diagrams when necessary. (18points) 1. What does microeconomics study? And what are the main differences between microeconomics and macroeconomics? (8 points) 2. The government has decided that the free-market price of cheese is too low. a. Suppose the government imposes a binding price floor in the cheese market. Use a supply-and-demand diagram to show the effect of this policy on the price of cheese and the quantity of cheese sold. Is there a shortage or surplus of cheese? b. Farmers complain that the price floor has reduced their total revenue. Is this possible? Explain. (10 points)