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    ECO402 Final Term Paper

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    Ab Dul
    This document provides instructions and questions for a 150 minute microeconomics final exam consisting of 10 multiple choice and descriptive questions worth a total of 60 marks. The exam covers topics including cost and profit maximization, demand curves, perfect competition, oligopoly, price discrimination, and monopoly. Students are advised to allocate their time appropriately between the multiple choice and descriptive response sections.

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    ECO402 Final Term Paper

    Uploaded by

    Ab Dul
    41 views3 pages
    This document provides instructions and questions for a 150 minute microeconomics final exam consisting of 10 multiple choice and descriptive questions worth a total of 60 marks. The exam covers topics including cost and profit maximization, demand curves, perfect competition, oligopoly, price discrimination, and monopoly. Students are advised to allocate their time appropriately between the multiple choice and descriptive response sections.

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    This document provides instructions and questions for a 150 minute microeconomics final exam consisting of 10 multiple choice and descriptive questions worth a total of 60 marks. The exam covers topics including cost and profit maximization, demand curves, perfect competition, oligopoly, price discrimination, and monopoly. Students are advised to allocate their time appropriately between the multiple choice and descriptive response sections.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    41 views3 pages

    ECO402 Final Term Paper

    Uploaded by

    Ab Dul
    This document provides instructions and questions for a 150 minute microeconomics final exam consisting of 10 multiple choice and descriptive questions worth a total of 60 marks. The exam covers topics including cost and profit maximization, demand curves, perfect competition, oligopoly, price discrimination, and monopoly. Students are advised to allocate their time appropriately between the multiple choice and descriptive response sections.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    ECO402 Microeconomics
    Final Term Examination – Spring 2005
    Time Allowed: 150 Minutes

    INSTRUCTIONS:

    All questions are compulsory.


    This exam consists of 5 Multiple Choice Questions (MCQ's) and 5 descriptive
    questions.
    Each MCQ carries 2 Marks each and Descriptive Questions carry 10 Marks each.
    You should try to complete MCQ's in 10 - 15 minutes in order to give yourself 135 -
    140 minutes for descriptive questions.
    For each MCQ question, read the choices available and select the choice which you
    consider is the correct answer, by clicking on the appropriate check box.
    Save your answer before proceeding to the next question.
    Do not click the "Finish button" while solving your paper. Once you clicked the
    "Finish" button, you will not be able to access your paper again. Click it at the end of
    your paper. That means you have submitted your complete paper.
    A clock is given in the exam software. Software will automatically be closed at the end
    of 90 minutes.
    Remember not to spend too much time on any one MCQ. Since all MCQ's carry equal
    marks, it is important to manage your time and responses to test questions effectively.
    Failure to comply with the Supervisor's directions will result in your test being
    cancelled. Please comply with supervisor's directions to avoid any unpleasant event.

    Total Marks: 60 Total Questions: 10

    Question No. 1 Marks : 10


    Suppose that you are the manager of watch making firm operating in a
    2,
    competitive market your cost of production is given by C = 100 +Q where
    Q is the level of output and C is total cost. The marginal cost of
    production is 2Q .The fixed cost of production is $100. If the price of
    watches is $ 60, how many watches should you produce to maximize
    profit?

    Question No. 2 Marks : 02

    The kink in the kinked demand curve arises because:


    o there is a sharp, abrupt change in the price elasticity of demand
    o entry into the industry is relatively easy
    o monopoly profits are being made by some firms but not by
    others
    o the products sold by each firm are different

    Question No. 3 Marks : 10

    Can perfectly competitive firms earn economic profit? Explain.

    Question No. 4 Marks : 02

    When an industry is classified as oligopolistic, it consists of:

    o only one seller


    o many sellers with similar products
    o only a few sellers with either standardized or differentiated
    products
    o only a few buyers

    Question No. 5 Marks : 10

    Suppose that the market demand function of a perfectly competitive


    industry is given by QD = 4,750 – 50P and the market supply function is
    given by QS = 1,750 +50P, and P is expressed in dollars. Find the market
    equilibrium price.

    Question No. 6 Marks : 02

    In the short run, the supply curve for a perfectly competitive industry:

    o shifts to the right if new firms enter the industry


    o is the sum of all individual firms' average total cost curves
    o is horizontal
    o does not change if firms leave the industry

    Question No. 7 Marks : 10

    Do you agree or disagree with each of the following statement. Explain


    your reasons.

    (a) Average fixed cost does not change as the output change.
    (b) Firms will never sells its product for less than it costs to produce
    it.

    Question No. 8 Marks : 02

    When the monopolistic producer practices price discrimination:

    o different prices are used to ration different goods among


    different consumers
    o different groups of consumers are charged different prices for
    the same good
    o social welfare is improved
    o all consumers are charged different prices for different goods

    Question No. 9 Marks : 10

    A sales tax of $1 per unit of output is placed on one firm whose product
    sells for $5 in a competitive industry.

    (a) How will this tax affect the cost curves for the firm?
    (b)Will there be entry or exit?

    Question No. 10 Marks : 02

    The monopolistic producer:

    o is not concerned with the cost of production since higher cost


    can be passed on to consumers
    o tries to maximize total revenue
    o usually produces in the inelastic range of the demand curve
    o tries to minimize the cost of producing a given level of output

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