Econ-202 Exam #2

Front 1

In the table, average costs when quantity = 0 are crossed out. Why?

Back 1

Because you can’t divide by 0

Front 2

In the table, marginal costs when quantity =0 is crossed out. Why?

Back 2

Because you can’t increase production from a negative amount to zero.

Front 3

Consider Figure 1 (last page of test). What type of market is this?

Back 3

Purely competitive market

Front 4

In Figure 1 ATC has a U shape because

Back 4

AVC has a U shape

Front 5

In Fig. 2 which MR curve shows the firm earning an economic loss and shutting down in the short run?

Back 5

MR4

Front 6

The place where every firm will operate in order to maximize profits is

Back 6

Where MC = MR

Front 7

In Fig. 1 which curve also is the firm’s demand curve?

Back 7

MR

Front 8

In Fig. 1 which curve also is the firms supply curve?

Back 8

MC

Front 9

Consider the market in Fig 3. What market is this?

Back 9

Monopoly

Front 10

The firm in Fig. 3 is a ________ while the firm in Fig. 1 is a ________.

Back 10

Price searcher, price taker

Front 11

In Fig. 3, ACE is

Back 11

Competitive consumers surplus

Front 12

In Fig. 3 PBDE IS

Back 12

Profit captured from consumer’s surplus

Front 13

In Fig. 3 BCD is

Back 13

Dead weight loss

Front 14

What type of market is figure 4?

Back 14

Monopolistically competitive market

Front 15

In fig 4, P2BYX represents

Back 15

Economic profit

Front 16

Free entry and exit larger number of buyers and sellers, homogeneous/ heterogeneous goods and perfect information. Which market do these characteristics not describe?

Back 16

Monopoly

Front 17

A group of firms which come together and act like a monopoly:

Back 17

Cartel

Front 18

If at quantity = 200, ATC= $15, and AVC=$10, TFC would =?

Back 18

1401-1800

Front 19

The theory of regulation which says that regulations are passed not to benefit the public but to benefit the industry being regulated:

Back 19

Capture theory

Front 20

The theory of regulation which says that regulations are passed to correct market failures:

Back 20

Public interest theory

Front 21

The theory of regulation which says that monopolies and very competitive industries most want to be regulated:

Back 21

Economic theory of regulation ala Stigler/Peltzman

Front 22

Section 1 of the Sherman Antitrust Act of 1890 says

Back 22

Price fixing is illegal

Front 23

Section 2 of the Sherman Antitrust Act says

Back 23

Monopolization of the attempt to monopolize is a felony

Front 24

Section 2 of the Clayton Act says

Back 24

Price discrimination is illegal

Front 25

There are 3 types of mergers. Which type describes a producer merging with a supplier?

Back 25

Vertical merger

Front 26

In a purely competitive market the firm owner is a

Back 26

Price taker

Front 27

Why does ATC have a 'U' shape?

Back 27

Because AVC has a 'U' shape

Front 28

What is the only antitrust crime which will put you in jail?

Back 28

Sect. 1 of the Sherman Act