ECON 2610,  Principles of Microeconomics        Sample Exam #2 Spring, 2004         Dr. Usip


Name _________________________

1. Fill in the missing values:

   L	TP	AP	MPP
   1	25
   2	46
   3	60
   4	68

2. Draw the supply and demand curves for a competitive market on the graph on the left.   Then draw the demand, MR, ATC,  and MC curves for a typical firm on the graph on the right. Indicate the profit-maximizing level of output and the area representing the amount of profit the firm is making
3. On the graph below, draw the demand, MR, ATC, and MC curves for a monopolist.   Indicate the profit-maximizing price and level of output, and the area representing the firm's level of profit.
4. List the key characteristics of each of the following market structures:
   A.    Perfect competition
   B.    Perfect monopoly
   C.    Monopolistic competition
   D.    Oligopoly
5. Define the term dominant strategy.
6. The table shows values for a monopolist. Fill in the blank cells in the table below.

1. Put an "X" directly over the "T" if the statement is true, or an "X" over the "F" if it is false.
   T F    In a market with monopolistic competition, the entry of new firms will shift the demand curves of the existing firms to the right.
   T F    Members of a cartel can increase their profits by cheating on the cartel if other members of the cartel do not cheat.
   T F    A "price leader" in an oligopoly is typically either the firm with the biggest share of the market or the low-cost producer.
   T F    A natural monopoly occurs when one firm owns all of the natural resources needed to produce a good.
   T F    Price discrimination occurs when firms sell output to different consumers at different prices, and there are no differences in the cost of supplying the good.
   T F    In a market with monopolistic competition, the entry of new firms will shift the demand curves of the existing firms to the right.
   T F    Members of a cartel can increase their profits by cheating on the cartel if other members of the cartel do not cheat.
   T F    A "price leader" in an oligopoly is typically either the firm with the biggest share of the market or the low-cost producer.
   T F    A natural monopoly occurs when one firm owns all of the natural resources needed to produce a good.
   T F    If a township gives a cable TV company a monopoly over cable services in that township, any economic profits earned by the cable company would be an example of real economic rents

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