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ECON1000 Summer2018 Exam2AA.pdf
ECON1000_Summer2018_Exam2AA.pdf
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ECON1000_Summer2018_Exam2AA.pdf-ECON 1000 (Summer 2018 – Section
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ECON1000_Summer2018_Exam2AA.pdf-ECON 1000 (Summer 2018 – Section
Page 5
For Questions 25 through 28, consider a monopolist facing Demand and with Marginal Costs and
Marginal Revenue as illustrated below.
25.
The efficient level of output for this good is _____ units.
A.
1,505
B.
2,170
C.
2,835
D.
3,440
26.
To maximize profit, this monopolist would
A.
sell 2,835 units of output, each at a price of $7.10.
B.
sell 2,170 units of output, each at a price of $9.75.
C.
sell 1,505 units of output, each at a price of $7.10.
D.
sell 1,505 units of output, each at a price of $12.80.
27.
When this monopolist chooses the price and quantity which maximizes profit, Total Consumers’
Surplus is ____________, Total Producer’s Surplus (i.e., Monopoly Surplus) is ____________,
and Deadweight Loss is ____________.
A.
zero; positive; positive.
B.
positive; positive; zero.
C.
zero; positive; zero.
D.
positive; positive; positive.
28.
If the government were to supply this good and sell it for $7.10 per unit (and provide all units that
consumers want to purchase at this price), there would be a Deadweight Loss equal to
A.
areas “
(a)+(b)
.”
B.
areas “
(c)+(d)
.”
C.
area “
(e)
.”
D.
areas “
(f)+(g)
.”
$
quantity
0
0
Demand
Marginal Revenue
Marginal Costs
of Production
7.10
9.75
12.80
1,505
2,170
2,835
d
22.40
f
c
e
3,440
a
b
g
4.05
Page 6
29.
Between January 1948 and December 2015, the highest value of the Misery Index in the United
States was a value of
A.
– 4.12 in February 1949.
B.
2.98 in June 1954.
C.
10.56 in August 1999.
D.
21.98 in June 1980.
30.
Consumption Expenditures are defined as
A.
purchases of newly produced goods/services by households.
B.
purchases of newly produced goods/services by firms.
C.
purchases of newly produced goods/services by local, state, and federal governments.
D.
the difference between exports and imports.
31.
“Market Failure” can be described as a situation in which
A.
a single seller of a good has substantial control over the price of the good.
B.
the “free market outcome” is NOT efficient.
C.
the sum of gains/losses over all people in society is positive.
D.
wealthy people in poor countries choose to invest their scarce financial capital abroad
instead of at home.
32.
The Allocation Function of Government refers to
A.
government production of goods or regulation of business, aimed at getting the “right
mix” of products produced (each in the “ideal quantity” and at the “ideal quality”).
B.
government policies aimed at changing the final distribution of goods/services across
consumers, usually with the intention of realizing a “fairer” apportionment of
consumption, income, and wealth.
C.
attempts by government to minimize fluctuations in macroeconomic activity.
D.
attempts by elected officials to influence voter behavior by essentially bribing voters with
free government services/benefits.
33.
When observing inflation rates for various countries around the world in 2015, it was noted that
________________ realized negative rates of inflation in that year.
A.
Argentina and Mexico
B.
Zimbabwe and Brazil
C.
the United States and Russia
D.
Bulgaria and Finland
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