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Economics Multiple Choice Questions




Question;1.) Scholastic;is the exclusive publisher of the Harry Potter series in the United States;because it owns the copyright to the books.;a.);The;government gives a single firm the exclusive right to produce Harry Potter;books.;b.);It;is less expensive for one publisher to print Harry Potter books than for many;producers to do so.;c.);Scholastic;owns a key resource used to produce Harry Potter books.;2.) The;Aluminum Company of America (Alcoa), the sole producer of aluminum in the;United States until the 1940s, controlled almost all sources of bauxite in the;United States.;a.);The government gives Alcoa the;exclusive right to produce aluminum.;b.;It is less expensive for one producer;to manufacture aluminum than for many producers to do so.;c.;Alcoa has control over a key resource.;Scenario;Use the following information to answer questions 3-4.;The graph below shows the market demand for computers in a small country. To;develop a domestic computer industry, the government prohibits imports of;computers and gives a single local firm the sole right to produce and sell;computers (that is, it is a legal monopoly). The demand curve shows the local;demand for computers. The cost curves show the marginal cost (MC) and average;total cost (ATC) of the single producer. The graph also shows the marginal;revenue (MR) curve faced by this firm.;3.) How;many computers will the monopolist sell to maximize profit?;a.) 0;b.) 400;c.) 600;d.) 690;e.) 1250;4.) At;what price will the monopolist sell each computer?;a.) 1,000;b.) 1,300;c.) 2,000;d.) 2,500;Scenario;Use the following information to answer questions 5-7.;High Wire Cinema is the only movie theater in a small town. The following graph;shows the market demand, marginal revenue, and cost curves of this single-price;monopoly.;5.) If;the monopolist produces at the profit maximizing rate of output, what will be;the total revenue?;a.) $8,000;b.) $24,000;c.) $15,000;d.) $24,000;6.) If;the monopolist produces at the profit maximizing rate of output, what will be;the total cost?;a.) $800;b.) $1,200;c.) $2,400;d.) $22,750;7.) If;this monopolist wishes to maximize profits, then what price should she charge?;a.) $2;b.) $3;c.) $4;d.) $5;e.) $6;f.) $7;g.) $8;Scenario;Use the following information to answer questions 8-10.;Toes owns the only record store in town and has the following demand, MR, and;MC curves.;8.) If;the record industry were perfectly competitive, the total welfare in town would;be represented by ______.;a.)Area A + Area B + Area C + Area D +;Area E;b.)Area A + Area B + Area D + Area E;c.)Area C + Area E;d.)Area A + Area B + Area C;9.) If;B. Toes acts as a single-price monopolist, it will sell ____ records at a price;of ___ per record.;a.) Q1;P1;b.) Q1;P2;c.) Q1;P3;d.) Q2;P1;e.) Q2;P2;f.) Q2;P3;10.) If B. Toes is able to use perfect price;discrimination, consumer surplus equals ____, and producer surplus equals;Choose one answer.;a. Area A, Area B +;Area C + Area D + Area E;b. Area A + Area B;+ Area C + Area D + Area E, zero;c. Area C + Area E;Area A + Area B;d. Zero, Area A +;Area B + Area C + Area D + Area E


Paper#55907 | Written in 18-Jul-2015

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