Microeconomics Answers

QUESTION 20

The monopolist is not seeking to maximize revenue:

1. But rather to minimize costs.
2. But instead to earn the highest possible profit.
3. But instead to benefit society most.
4. All of the above.
5. None of the above. 

QUESTION 21

A monopolist often does not have enough information to analyze:

1. Its competitors.
2. The law.
3. Its entire total revenue curve.
4. Its entire total cost curve.
5. Both answers C and D above.

QUESTION 22

A monopolist can sell a larger quantity:

1. Only if the government makes a special allowance.
2. Even when the government prohibits it.
3. And see an increase in total revenue.
4. And see a decline in total revenue.
5. Coupons, but not the product it produces.

QUESTION 9

Most legal monopolies are:

1. Products necessary for everyday life.
2. Socially beneficial.
3. Utilities.
4. All of the above.
5. None of the above.  

QUESTION 10

In certain areas like the invention of new software, it has been unclear:

1. Whether patent or copyright protection should apply.
2. How long to apply copyright protection.
3. Who holds the patent rights.
4. All of the above.
5. None of the above.

QUESTION 11

A firmly established brand name:

1. Is a recipe for disaster.
2. Is easy to dislodge.
3. Can be difficult to dislodge.
4. Has no trademark protection.
5. Has only very limited trademark protection.

QUESTION 12

Perfect competition is no longer a reasonable description of how an industry works:

1. Since 9/11.
2. Since 2003.
3. Afternoons.
4. When barriers to entry exist.
5. When barriers to entry do not exist.

QUESTION 5

Determining this level of output and price with the political pressures, time constraints, and limited information in the real world is:

1. A job for a superhero.
2. Impossible.
3. Much harder than identifying the point on a graph.
4. Much easier than identifying the point on a graph.
5. Suboptimal.  

QUESTION 6

Firms under cost-plus regulation have an incentive to generate:

1. Larger levels of output.
2. Lower costs.
3. Higher costs by investing in research and development.
4. Higher costs by building huge factories or employing many staff.
5. Electricity from a carpenter’s shop.

QUESTION 7

This can provide the natural monopoly with incentives for efficiency and innovation:

1. Higher costs.
2. Higher prices.
3. The possibility of earning greater profits or experiencing losses.
4. The market.
5. All of the above.

QUESTION 1

A natural monopoly poses a difficult challenge for:

1. Competition policy.
2. Other firms in the industry.
3. Oligopolists.
4. Organists.
5. Originalists.

QUESTION 2

This would raise the average cost of production and force customers to pay more:

1. Government subsidies.
2. Tax rebates.
3. Tax breaks.
4. Splitting up a natural monopoly.
5. All of the above. 

QUESTION 3

In a situation with a downward-sloping average cost curve:

1. Two small firms will have a higher average cost than one larger firm.
2. One larger firm will have a higher average cost than two smaller firms.
3. Three smaller firms will have a lower average cost than two larger ones.
4. Consumers can never benefit.
5. No economic profits are possible.

QUESTION 4

An alternative to dealing with a natural monopoly is that regulators may decide:

1. To outlaw this product entirely.
2. To set prices and quantities produced for this industry.
3. Take an extended vacation.
4. To make this product strictly illegal.
5. All of the above.

Explain marginal utility and demand.

a. Analyse the cross price elasticity of demand for wheat and rice when a change in the price of wheat from Rs.70 to Rs. 90 results in a change in the quantity demand for wheat from kg 3000 to kg 5000 in the market. Interpret the value of the coefficient.

Consider the following short-run production function: TP = 𝒇(K̇ ,L) where TP = Total production K = Capital L = Labour 7.1.1. With reference to capital and labour, explain how production can be increased in the short run. 

Show what happens to a monopoly firm operating in the long-run?

Ordered delivery also wastes time.

The bread is very nice, and customers are always willing to go buy the bread. But the conditions on Saturdays make some customers going for alternatives. Jane goes there on Saturday, amidst the frustrations, the muttering to get her bread. She always lives the placed upset for her favorite bread. Jane has been complaining to the baker to do something about it. She has also commented on the problem to you as her friend. And another problem: The baker has telling her faithful customers of raising the price of bread from GHS 6 to GHS 8, something Jane is not so happy about.

1.As an economist and a friend to Jane, what advice will you give to the baker?

2.Explain the three (3) stages of production to the baker.

3.Explain the forecast of the demand for bread when price is increased

Calculate the consumption of goods and services in your family in the following categories:

a. Groceries like food items Consumption Prices Amount(Rs.)

(A) Meat items

1. Chicken

2. Beef

3. Mutton

4. Any other

b. Pulses

c. Spices

d. Other items

e. Utilities

(A) Electricity

(B) Gas

(C) Water

(D) Internet

(E) Drainage and Conservancy

(F) Any Other

f. Conveyance

(A) Father’s office

(B) Mother’s shopping

(C) Siblings schooling

(D) Yours University

(E) Any other (if any)

g. Tuition Fees (if any)

(A) School…(Siblings)

(B) College..(Siblings)

(C) University (Yours + Siblings)

(D) Tuition (Yours + Siblings)

(E) Any Other

h. Medical Charges (if any)

(A) Grand Parents (if any)

(B) Parents (if any)

(C) Yours and Siblings (if any)

(D) Any other