TMA2/ECO231

TMA Quiz Questions TMA: TMA2/ECO231 Matric Number:  SCORE=10.00 ECO231 - Micro Economic Theory I Mr. Adedeji Abiodun Liadi (aliadi@noun.edu.ng ) 1 When input A is the only variable input for an imperfect competitor in the product market, the firm’s demand for input A is given by its VMP curve MRP curve MFC curve none of the above 2 The slope of the demand curve for an input such as labour will be zero positive negative determined by the output effect 3 Over time, an increase in wages in one labour market, relative to others, will increase labour force participation lead to the immigration of workers lead to an increase in the quantity of labour supplied all of the above 4 In long-run equilibrium, the pure monopolist (as opposed to the perfectly competitive firm) can make pure profits because of blocked entry high selling prices low LAC costs advertising 5 If the demand curves for a monopolist’s commodity are identical in two separate markets, then, by practicing third degree price discrimination, the monopolist will increase TR and total profits can increase TR and total profits cannot increase TR and total profits will charge a different price in different markets 6 To maximize utility subject to budget constraint, the ratio of marginal utility to price should be the same for all consumers different for all consumers different for all goods the same for all goods consumed 7 Which of the following utilizes an ordinal scale of measurement mileage height temperature volume 8 Which of the following is not a mathematical technique frequently used in microeconomics optimization function notation accounting graphing 9 To maximize satisfaction subject to a budget constraint, the consumer should choose the commodity basket that is located where the highest possible indifference curve the highest indifference curve has contact with the budget line MRS=Px/Py all of the above 10 A franchise is a right that may be conferred by government to be one of a limited number of suppliers in an area to be one of a limited number of suppliers in an area all of the above 11 The demand curve facing the monopolist has a negative slope is vertical at a quantity specified by the monopolist has a positive slope is horizontal at market price 12 Monopolistic competition there will be a single product and price a product group and a range of prices a product differentiation strategy toward rival firms 13 A long run monopolistic competition will result per unit costs of production that are higher than necessary at the minimum on the LRAC curve on the LRAC curve greater than price 14 At equilibrium, the slope of the indifference curve is smaller than the slope of the budget line greater than the slope of the budget line either equal, larger, or smaller than the slope of the budget line equal to the slope of the budget line 15 In comparision with perfectly competitive market group of suppliers operating in the same market a cartel acting as a monopoly will choose a lower price and a higher quantity lower price and lower a quantity higher price and higher quantity higher price and a lower quantity 16 When the industry is in long-run equilibrium, the monopolistic competitor will produce at the lowest point on its LAC curve  Always never sometimes cannot say 17 In monopolistic competition, we have few firms selling a differentiated product many firms selling a homogeneous product few firms selling a homogeneous product many firms selling a differentiated product 18 Which form of monopoly regulation is most advantageous for the consumer Price control lump-sum tax per-unit tax all of the above three forms are equally advantageous 19 In the case of price leadership by the dominant firm, all the firms in the purely oligopolistic industry will produce their best level of output always never sometimes rarely 20 If the price in a perfectly competitive firm is N5, determine its profit function if TC = Q3- 8Q2 + 15Q+ 10 5Q- Q3- 8Q2 + Q 5Q- Q3+ 8Q2 -15Q- 10 5Q- Q3- 8Q2 + 15Q+ 10 5Q- Q3- 16Q + 15Q+ 10