U Question 1 3 pts For any given year, the CPl is the price of the basket of goods and services in the: given year divided by the price of the basket in the base year, then multiplied by 100 given year divided by the price of the basket in the previous year, then multiplied by 100 base year divided by the price of the basket in the given year, then multiplied by 100. previous year divided by the price of the basket in the given year, then multiplied by 100 Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further, suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink. Which of the following statements is correct? This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity. The price paid by buyers is $0.30 per drink more than it was before the tax Forty percent of the burden of the tax falls on sellers All the options are correct Marginal Revenue Refer to the figure above. To maximise total surplus, a benevolent social planner would choose which of the following outcomes? 100 units of output and a price of $20 per unit 150 units of output and a price of $20 per unit 150 units of output and a price of $30 per unit 200 units of output and a price of $20 per unit Which of the following is not a widely acknowledged problem with using the CPI as a measure of the cost of living? substitution bias introduction of new goods unmeasured quality change unmeasured price change oThe figure is drawn for a monopolistically-competitive firm. Price MC 160 140 ATC 123.33 90 Demand 56.67 MR 100 133.33 154.92 Quantity Refer to the figure above. Efficient scale is reached O at 100 units at 133.33 units O between 133.33 and 154.92 units at 154.92 unitsLopes and HomeMax scenario. Lopes Increase the size of store and parking lot Do not increase the size of store and parking lot Increase the size of store Lopes = $1.0 million Lopes = $0.4 million and parking lot HomeMax = $1.5 million HomeMax = $3.4 million HomeMax Do not increase Lopes = $3.2 million Lopes = $2.0 million the size of store HomeMax = $0.6 million HomeMax = $2.5 million and parking lot Refer to the table above. Suppose the owners of Lopes and HomeMax meet for a friendly game of golf one afternoon and happen to discuss a strategy to optimize growth related profit. If they both agree to cooperate on a strategy that maximizes their joint profits, annual profits will be: $1.0 million for Lopes and by $1.5 million for HomeMax $0.4 million for Lopes and by $3.4 million for HomeMax $3.2 million for Lopes and by $0.6 million for HomeMax $2.0 million for Lopes and by $2.5 million for HomeMax oThe figure is drawn for a monopolistically-competitive firm. Price MC 160 140 ATC 123.33 90 Demand 56.67 MR 100 133.33 154.92 Quantity Refer to the figure above. In response to the situation represented by the figure, we would expect: some of the firms that are currently in the market to exit. the demand for this firm's product to increase, assuming this firm does not exit this firm's profit to move from its current value toward zero All of the options are correctChanges in real GDP reflect: only changes in prices only changes in the amounts being produced both changes in prices and changes in the amounts being produced. neither changes in prices nor changes in the amounts being produced. Price Marginal Cost 40 O 30 20 Demand 100 150 200 Quantity Marginal Revenue Refer to the figure above. The deadweight loss caused by a profit-maximizing monopoly amounts to: O $250 O $500 O $750 O $1,000Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. Labor Hours Needed to Make . . Quantity Produced in 36 Hours 1 Parasol Plate Parasol Plate Huang 2 6 18 6 Min 2 4 18 9 Refer to the table above. Huang has an absolute advantage in the production of: parasols and a comparative advantage in the production of parasols. parasols and a comparative advantage in the production of plates neither good and a comparative advantage in the production of parasols. neither good and a comparative advantage in the production of plates Other things the same, in which case is the quantity produced the highest? There is one firm There are two firms that successfully collude There are two firms in Nash equilibrium There are a very large number of firms IMarginal Revenue Refer to the figure above. To maximise its profit, a monopolist would choose which of the following outcomes? 100 units of output and a price of $20 per unit 100 units of output and a price of $40 per unit 150 units of output and a price of $30 per unit 200 units of output and a price of $40 per unit The figure is drawn for a monopolistically-competitive firm. Price MC 160 140 ATC 123.33 90 Demand 56.67 MR 100 133.33 154.92 Quantity Refer to the figure above. The firm's maximum profit is: O $-7,000 O $-5,000 $-2,000 O The firm's maximum profit cannot be determined from the figure.Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. Labor Hours Needed to Make = Quantity Produced in 36 1 Hours Parasol Plate Parasol Plate Huang 2 6 18 6 Min 2 4 18 9 Refer to the table above. The opportunity cost of 1 parasol for Huang is: 1/3 plate 1/2 plate 3 plates 6 plates