ECON101 Study Guide - Final Guide: Variable Cost, Perfect Competition, Demand Curve

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turquoisegnu128

23 Oct 2018

School

University of Alberta

Department

Economics

Course

ECON101

Professor

all

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ECON101 Full Course Notes

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You have two hours to complete this exam. For each of the following 50 questions, choose the best response and put your answers on the scan sheet. The answers to the questions will be posted on this course"s web page. 1 frontier: volume of physical resources, level of labour skills, level of technology, amount of factories on hand, all of the above are correct. Some university students think that because a university degree greatly increases their earning potential there is no opportunity cost of attending university. Suppose that the demand curve for apples is downward sloping, and the price per tonne increases from to . We would then expect: the demand curve to shift toward the origin, the demand for apples to decrease, the quantity demanded of apples to increase, the quantity demanded of apples to decrease, a and b.

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Instructions: Choose the best answer for each question. Mark your answers on this exam and on your scantron sheet. You may not use any outside materials: calculators, smartphones, scratch paper, etc. There are 40 questions. 1. Suppose that an increase in the price of Widgets from $14 to $16 per Widget increases the quantity of Widgets supplied from 24 to 36 Widgets. Using the midpoint method, what is the elasticity of supply of Widgets? (a) 0.25 (b) 3 (c) 3.5 (d) 2.67

thoughts on Classical Model and Keynesian Model. What assumptions about economic behaviors and economic policies are implemented in the U.S. economy today? Have you gained a better understanding of why the Obama administration's economists requested Congress to approve the "stimulus package"? Do you have any alternative proposals for economic growth (or criticisms of the current policies)? Note: These questions intend to get you started in your discussionâto make you think. Use one or two of them to get yourself started in relating the models to current economic policies. You will no doubt have your own questions to discuss as well. In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted by another student. A substantive response is more than just saying you agree or disagree. Explain why.

Essay questions are due at the end of the course. It is strongly recommended that you accumulate your answers as you complete each unit and don't leave them all until the last minute. Please type your responses to the following short answer/discussion questions and short problems. Although your answers need not be lengthy (generally, 1-2 short paragraphs is fine), you should be careful to respond to all parts of the question asked. It is very important that your answers demonstrate that you have made the effort to read the chapter that relates to the question and thoroughly studied the relevant topic. Answers should be submitted in complete sentence and paragraph form, and writing presentation is important. Please remember that late essay questions are NOT accepted. 1. How is a "market" defined? Distinguish between an industry and a market. (1 point) 2. Suppose a market becomes more competitive over time. What happens to the elasticity of demand for a particular firm's good as its market becomes more competitive? (1 point) 3. Why are the monopolist's and the monopolistically competitive firm's demand curves downward sloping while the competitive firm's demand curve is horizontal? (1 point) 4. Why is a perfectly competitive firm's long-run supply curve the same as its marginal cost curve above the average total cost curve? (1 point) 5. Explain why monopolists do not achieve efficiency. (1 point) 6. Another student advocates the forced break-up of large firms, such as Microsoft and AT&T, on the grounds that they have a lot of monopoly power, which they use to charge inefficiently high prices. According to Schumpeter, would breaking apart these gigantic firms guarantee consumers lower prices? Explain. (1 point) 7. Explain why firms should not shut down in the short run until price falls below average variable cost. (2 points) 8. Suppose your economics professor publicly states that she grades on a curve (i.e., the top 10% of the students get an A, the next 20% get a B, the next 40% get a C, the next 20% get a D, and the lowest 10% fail). The whole class could save itself a lot of work by agreeing privately not to study at all for the final exam and just letting the rankings thus far determine the final grades. Why might such an agreement be difficult to maintain and enforce? Which market structure, if any, is this situation most analogous to? (1 point) 9. Why do firms practice price discrimination? Is efficiency affected by price discrimination? If so, how? (1 point)

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ECON101 Study Guide - Final Guide: Variable Cost, Perfect Competition, Demand Curve

ECON101 Full Course Notes

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