Microeconomics Chapter 11 Homework

Microeconomics, 4e (Perloff)Chapter 11Monopoly11.1 Monopoly Profit Maximization1) For a monopoly, marginal revenue is less than price becauseA) the firm is a price taker.B) the firm must lower price if it wishes to sell more output.C) the firm can sell all of its output at any price.D) the demand for the firm's output is perfectly elastic.Answer: BTopic: Monopoly Profit Maximization2) For a monopoly, marginal revenue is less than price becauseTopic: Monopoly Profit Maximization3) Marginal Revenue isTopic: Monopoly Profit Maximization4) At the current level of output a firm's marginal cost equal 16 and marginal revenue equals 10. The firms Topic: Monopoly Profit Maximization5) At an output level of 100 a monopolist faces MC=15 and MR=17. At output level q=101 the monopolists MC=16 and MR=15. To maximize profits the firm A) should produce 100 units.B) should produce 101 units.C) cannot maximize profits.D) is not a monopoly.Answer: ATopic: Monopoly Profit Maximization6) If a firm is able to set priceTopic: Monopoly Profit Maximization1 Economics 201: Principles of Microeconomics –Fall 2012 Department of Economics Indiana University-Purdue University @ Indianapolis (IUPUI) Lecturer: Baiyee-Mbi Agbor-Baiyee, PhD Answer Key=Quiz8-Chapter11 - Production and Costs 1Labor (workers per day) Total product (units/day) Marginal product Average product 0 0 0 0 1 2 2 212=2 8 61228=−−428=3 12 423812=−−4312=4 1ker64516⇒==−−worthofMPX33412)15(==−−=XY75.3415==Z5 16 1 2.3516=1) In the above table, fill in the missing values for X, Y, and Z A) 15, 4, and 1.75. B) 15, 3, and 3.75. C. 15, 4, and 3.75 D) 15, 3, and 1.75 E) None of the above. Answer: B See the solution in the table above. 2) In the above table, the marginal product is greatest when the________ and the average product is less than marginal product when________ A) first worker is hired and the second worker is hired. B) second worker is hired and the second is hired. C) third worker is hired and when the second or third worker is hired. D) fourth worker is hired and the third worker is hired. E) None of the above Answer: C The MP=6 is highest when the 2ndworker is hired see table above AP<MP 4< 6 when the 2ndworker is hired see table above 3) The law of diminishing returns 