ECON 220 Long Answer Questions

Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units (with the supply curve being S0). If the government imposes a $2 per-unit tax on this product, what is the new price?

$7

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU per dollar for fourth can is

1

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 2, Marginal Cost=$

10

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU for second can is

10

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 2, Avg Var. Cost=$

15

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU for first can is

16

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU for fourth can is

2

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 1, Avg Var. Cost=$

20

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 1, Marginal Cost=$

20

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 2, Avg Total Cost=$

25

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU per dollar for third can is

3

Here is data for a company in perfect competition: If price (=MR) were $20, the profit-max or loss-min output level is units and it is making a (type "profit" or "loss".)

3, profit

Answer the following questions for a monopolist. The profit-maximizing or loss-minimizing output level is ____ units.

30

Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units (with the supply curve being S0). If the government imposes a $2 per-unit tax on this product, what is the new equilibrium quantity?

30

Here is data for a company in perfect competition: Fill in the blanks: At an output level of 1, Avg Total Cost=$

40

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU per dollar for second can is

5

In the long run, a transportation company can own either 1, 2, 3, or 4 trucks. An accountant estimates the short-run average cost curve at each choice of trucks owned. Based on the long-run average cost, the minimum efficiency output level is ______ units.

500

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU for third can is

6

Answer the following questions for a monopolist. The price this profit-maximizing monopolist would charge is $_____.

8

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Compute marginal utility and marginal utility per dollar. MU per dollar for first can is

8

Which of the four graphs illustrates an increase in quantity supplied?

A

Which of the four graphs represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

A

Graph A shows which type of graph?

An increase in demand and an increase in quantity supplied.

Which of the four graphs represents the market for winter coats as we progress from winter into spring?

B

Which of the four graphs represents the market for peanut butter after major hurricane hits the peanut-growing south?

D

The following describes John's utility for consuming cans of soda. The price of a can of soda is $2. Suppose John is at the store considering buying the first can of soda but sees a bottle of apple juice. The bottle of apple juice gives him a utility of 20 and has a price of $4. Which would he choose - the first can of soda or the bottle of juice and why?

He should still go with the first can of soda because while the apple juice does give him more utility it is for a more expensive price. Before the marginal utility per dollar for the first can of soda was 8 and the marginal utility per dollar for a bottle of apple juice is 5. The wise thing for him to do would be to choose the item that gives him the most utility for the least possible cost. This is why he should still choose the can of soda first.

Jane is the pricing manager at the local gadget manufacturing company. Senior management is concerned about a recent fall in market share and tells Jane to lower price by 5%. In preparation for the strategy Jane got the following historical data from the accounting department: If the proposed price cut were implemented, would revenue rise, fall, or remain unchanged?

Rise

Jane is the pricing manager at the local gadget manufacturing company. Senior management is concerned about a recent fall in market share and tells Jane to lower price by 5%. In preparation for the strategy Jane got the following historical data from the accounting department: Please identify whether the demand for gadgets is elastic, inelastic, or unit elastic. Explain why you concluded the way you did.

The demand for gadgets is elastic because the percentage change in quantity was greater than the percentage change in price. This means that the quantity was affected by the change in price which signifies that the gadgets were not a necessity and therefore are elastic.

Jane is the pricing manager at the local gadget manufacturing company. Senior management is concerned about a recent fall in market share and tells Jane to lower price by 5%. In preparation for the strategy Jane got the following historical data from the accounting department: What is the price elasticity of demand using the midpoint formula? Please make a note of your answer since the following questions refer to this question 1a.

[(60-100)/80]/[($50-$40)/45]=2.25

Answer the following questions for a monopolist. At the optimal price, this company would it make a ___ (write "profit" or "loss") of $___

profit, 60