# Lernkarten

Karten 73 Karten 5 Lernende English Universität 24.06.2020 / 24.12.2020 Keine Angabe
0 Exakte Antworten 22 Text Antworten 51 Multiple Choice Antworten

For any particular good, an increase in the price of a complement would most likely
result in?

A movement along the demand curve to the right

A shift in the demand curve to the left

A shift in the demand curve to the right

Consider the following statements:
Statement I: If close substitutes are easily available for a particular good, the price
elasticity of demand for that good cannot be identified.
Statement II: If a relatively large proportion of a person’s income is spent on a
particular good, the price elasticity of demand for that good is most likely
relatively high.
Which of the following is true?

Both statements are incorrect.

Both statements are correct.

Only one statement II is correct

Consider the following statements:
Statement I: If the price elasticity of demand for a good equals -1.25, an increase in
price will result in a decrease in total revenue.
Statement II: If a decrease in price leads to a decrease in total revenue, demand for
the good is price elastic.
Which of the following is true?

Only Statement I is correct.

Only Statement II is correct.

Both Statements are incorrect.

When a rent ceiling (maximum price) is imposed below the equilibrium market
price, which of the following is most likely?

The unit price falls while quantity supplied increases

The unit price rises while quantity demanded falls

The unit price falls and the quantity supplied also falls.

Which of the following is least likely regarding indifference curves?

For a given consumer, the slope of one indifference curve changes along the indifference curve.

The indifference curves for two consumers can never intersect.

indifference curves are convex when viewed from the origin.

Robert’s MRSxy is given by 2.5. If Good Y is on the y axis and Good X is on the x axis,
the slope of the indifference curve is closest to?

2.5

-2.5

-0.4

This question addresses the budget constraint: The amount of Good A that a
consumer would have to give up in order to consume 1 more unit of Good B is given
by:

The ratio of the price of Good A to Good B

The marginal rate of substation of Good B for Good A

The ratio of the price of Good B to Good A

For any particular good, an decrease in the price of a complement would most likely result in?

A movement along the demand curve to the right

A shift in the demand curve to the left

A shift in the demand curve to the right

Consider the following statements:
Statement I: The availability of close substitutes for a particular good A has no effect on the price elasticity of demand for that good A.
Statement II: If a comparatively small proportion of a person’s income is spent on a particular good, the price elasticity of demand for that good is comparatively high (i.e. very elastic).
Which of the following is most likely true?

Both statements are incorrect.

Both statements are correct.

Only one statement is correct

Consider the following statements:
Statement I: If the price elasticity of demand for a good equals -2.5, an increase in price will result in a decrease in total revenue.
Statement II: If a decrease in price leads to an increase in total revenue, the demand for that good is price elastic.
Which of the following is most likely true?

Only Statement I is incorrect.

Only Statement II is incorrect.

Both Statements are incorrect.

When a price floor is imposed above the equilibrium market price, which of the following is most likely true?

Price falls while quantity supplied increases

Price rises while quantity demanded falls

Price and quantity supplied both fall

Which of the following statements is most likely true??

The indifference curves for two different consumers cannot intersect.

For a given consumer, the slope of one indifference curve changes along the indifference curve.

Total utility enjoyed by a consumer changes along one given indifference curve.

Peter’s MRSxy is given by 1.5. If Good Y is on the y axis and Good X is on the x axis, the slope of the indifference curve is closest to?

1.5

-0.67

-1.5

This question addresses the budget constraint: The amount of Good A that a consumer would have to give up in order to consume one more unit of Good B is given by:

The ratio of the price of Good A to Good B

The marginal rate of substitution of Good B for Good A

The ratio of the price of Good B to Good A

Which one of the following statements is correct?

If a monopolist faces the inverse demand function P = 50 - 5Q, which of the following statements is true?
I. The equation of the average revenue curve is AR(Q) = 50 – 5Q.
II. The marginal revenue curve is twice as steep as the average revenue curve.
III. For outputs less than 5, marginal revenue is positive, for outputs more than 5, marginal revenue is negative.

Only the statements I and II are true.

Only the statements II and III are true.

All three statements, I, II, and III are true

Suppose that a monopolist faced demand P = 120 - 4Q and has constant marginal cost MC = 30. If this monopolist engages in first degree price discrimination, total output will equal?

11.25

30

22.5

In a “homogeneous goods” duopoly, two firms, Rooler Inc. and AFG are fierce competitors. The market demand is given by P = 200 – 0.9Q1 – 0.9Q2. Q1 denotes Rooler Inc.’s output, and Q2 denotes AFG’s output. The marginal cost of each firm is 17.

a) Given this market demand function, what is Rooler Inc.’s profit-maximising quantity if AFG produces 60 units (in 1,000s)?

Q2 = 60
P = 200 – 0.9Q1 – 0.9 × 60 = 146 – 0.9Q1
The corresponding marginal revenue is:
MR = 146 – 1.8Q1
17 = 146 – 1.8Q1
129 = 1.8Q1
Q1 = 71.67 = 71,667 units

In a “homogeneous goods” duopoly, two firms, Rooler Inc. and AFG are fierce competitors. The market demand is given by P = 200 – 0.9Q1 – 0.9Q2. Q1 denotes Rooler Inc.’s output, and Q2 denotes AFG’s output. The marginal cost of each firm is 17.

Determine Rooler Inc.’s so-called “reaction function”.

P = (200 – 0.9Q2) – 0.9Q1
Therefore:
MR = (200 – 0.9Q2) – 1.8Q1 = 17
183 – 0.9 Q2 = 1.8 Q1
Q1 = 101.67 – 0.5Q2

In a “homogeneous goods” duopoly, two firms, Rooler Inc. and AFG are fierce competitors. The market demand is given by P = 200 – 0.9Q1 – 0.9Q2. Q1 denotes Rooler Inc.’s output, and Q2 denotes AFG’s output. The marginal cost of each firm is 17.

Compute the Cournot equilibrium quantities and price in this market.

Q2 = 101.67 – 0.5Q2
1.5Q2 = 101.67
Q2 = 67.78 = 67,778 units
P = 200 – 0.9 × 67.78 – 0.9 × 67.78
P = 78

Your employer, a pharmaceutical company, has a patent on a specific antibiotic. The inverse demand function for that drug is as follows: P = 800 – 4Q. Marginal cost is constant and equal to 100.
Use the inverse elasticity pricing rule IEPR to determine the profit maximising price and quantity. Clearly indicate your method and approach to the solution.

P = 800 – 4Q
Q = 200 – 0.25P
Therefore:
= – 0.25 x (P/Q) = – 0.25P/(200 – 0.25P )
since Q = 200 – 0.25P we obtain:
(P – 100) / P = -1 / [ – 0.25P/(200 – 0.25P ) ]
P – 100 = (200 – 0.25P ) / 0.25
0.25P – 25 = 200 – 0.25P
0.5P = 225
P = 450
Now we substitute P = 450 into the demand function:
Q = 200 – 0.25P = 200 – 0.25 x 450 = 200 – 112.5
Q = 87.5

Which-one(s) of the following statement(s) is/are correct?

I. Under the conditions of perfect competition, the supply function calculates the quantity a supplier is willing to produce in function of the selling price as well as the cost of the input factors needed for production, and the cost of complementary goods and/or substitutes.
II. Given everything else is held constant, an increase in the cost of labour leads to upward shift of the supply curve. Mathematically, this corresponds to a higher intercept.
III. An increase in the cost of the input factors has no effect on the supply curve because the market price decides, which quantity a firm is willing to supply

Statements I and II are correct.

All three statements are correct.

Statements II and III are correct.

Which-one of the following statements is correct?

Given are the following denotations:
MPL : marginal product of labour
MPK : marginal product of capital
PL : price of labour
PK : price of capital

If a firm wants to maximise output per monetary unit of input cost, then, given a two-factor production function with labour and capital, the following condition must hold: MPL = MPK .

If a firm wants to maximise output per monetary unit of input cost, then, given a two-factor production function with labour and capital, the following condition must hold: MPL/PL = MPK/PK .

If a firm wants to maximise output per monetary unit of input cost, then, given a two-factor production function with labour and capital, the following condition must hold: MPL × PL = MPK × PK .

Which one of the following statements is correct?

Under the conditions of perfect competition, firms are price takers only if they must lower their price to sell more units.

Under the conditions of monopolistic competition, in the absence of price discrimination, marginal revenue is not constant. It increases if more units are produced and sold at the market price

Under the conditions of perfect competition marginal revenue is equal to average revenue.

In your new job, you are responsible for the cost management in the production of a newly designed garden swing seat. Your predecessor has already worked on this project before you. She identified the following supply function:
QSx = –220 + 2.8Px – 10 W
QSx : quantity supplied
Px : selling price for one unit
W : wage per hour

Explicate the meaning of the term “+ 2.8Px “ in the above quoted supply function.

If the unit price increases by $1, then the supplier is willing to increase production by 2.8 units. In your new job, you are responsible for the cost management in the production of a newly designed garden swing seat. Your predecessor has already worked on this project before you. She identified the following supply function: QSx = –220 + 2.8Px – 10 W QSx : quantity supplied Px : selling price for one unit W : wage per hour Identify the supply function for an hourly wage of$25.

QSx = –220 + 2.8Px – 10 W
QSx = –220 + 2.8Px – 8 × 25 = –220 + 2.8Px – 250 = –470 + 2.8Px
QSx = –470 + 2.8Px

Given is the supply function of a specific firm:

QSx = –400 + 8Px

Px = 0.25QSx + 50

Px = 0.152QSx + 5

Px = 0.125QSx + 50

None of the above

Given is the supply function of a specific firm:
QSx = –400 + 8Px

If the unit price is \$200, how big is the quantity supplied and the corresponding producer surplus?

Quantity supplied 1500 / producer surplus 180000

Quantity supplied 1750 / proucer surplus 180000

Quantity supplied 1000 / producer surplus 90000

None of the above

Given is the supply function of a specific firm:
QSx = –400 + 8Px

Explain the term “producer surplus”.

Producer surplus refers to the difference between total revenue sellers receive from selling a given amount of a good and the total variable cost of producing that amount.

Assume that an individual supplier has the following supply function:
QSx = –200 + 4Px – 5 W
Where: QSx : quantity supplied
Px : selling price for one unit
W : wage per hour
Which of the three functions below represents the aggregate market supply curve? Assume that the wage per hour is 20, and that the market consists of 10 identical firms.

Px = 0.025QSx + 150

Px = 0.025QSx + 75

Px = 0.25QSx + 75

None of the above

Which-one(s) of the following statement(s) is/are correct?

I. Consumer choice theory can be defined as the branch of microeconomics that relates consumer demand curves to production and cost theory.
II. A consumption bundle, or consumption basket, is a specific combination of goods and services that a consumer would like to consume.
III. Under reasonable assumptions, it is possible to come up with a rule that translates the quantities of goods in different baskets into a number. That assignment is called the utility function of that consumer

Statements I and II are correct.

All three statements are correct.

Statements II and III are correct.