LSU ECON 2000 FINAL EXAM

"Left" gloves and "right" gloves provide a good example of

perfect complements

The average variable cost of producing 240 units is

$0.19

If the restaurant is able to use tying to price salads and steaks, what is the profit-maximizing price to charge for the "tied" good?

$20

Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

$280

A monopolist can sell 300 units of output for $50 per unit. Alternatively, it can sell 301 units of output for $49.60 per unit. The marginal revenue of the 301st unit of output is

-$70.40

If Aliyah's wage increases to $85 per hour of writing, which of the following points would fall on her budget constraint?

85 hours of leisure, $2,890 of consumption

Which of the following is not one of the ways that antitrust laws promote competition?

Antitrust laws allow the government to shut down a firm if the government believes the firm has monopoly power.

When the price of X is $40, the price of Y is $10, and the consumer's income is $80, the consumer's optimal choice is C. Then the price of X to $10. The income effect can be illustrated as the movement form

D to E

The average fixed cost curve

always declines with increased levels of output

Whenever a perfectly competitive firm chooses to change its level of output, holding the price of the product constant, its marginal revenue

does not change

A good is a normal good f the consumer buys less of it when

his income falls

A difference between explicit and implicit costs is that

implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do

Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In this market, an increase in demand will

increase price in the short run but not in the long run

Because of diminishing returns, a factor in abundant supply has a

low marginal product and low rental price

It would be possible for the consumer to reach I3 if

the price of Y decreases