2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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Sample practice questions for the Final
Due No due date Points 19 Questions 19 Time Limit None
Allowed Attempts Unlimited
Attempt History
Attempt Time Score
LATEST Attempt 1 14 minutes 17 out of 19
Submitted Dec 9 at 14:27
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0 / 1 ptsQuestion 1
Market demand is given by Q = 100 - P and supply is Q = -20 + P. Suppose that by
law Q must be equal to 20 so resources can be diverted to the war effort. What is the
price the consumers will pay? What is the consumer surplus?
D S
S
80, 200orrect Answer
40, 400
60, 600
40, 800
None of the other provided answers is correct. ou Answered
1 / 1 ptsQuestion 2
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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Suppose a production function is q = K L and in the short run capital (K) is fixed
at 125. If the wage is $10 and the rental rate on capital is $1.6, the fixed cost is
1/2 1/3
$2,000
$200Correct!
$20,000
$0
None of the other provided answers is correct.
1 / 1 ptsQuestion 3
Product differentiation complicates the study of oligopolies because such markets
may not
be efficient.
have prices equal to marginal cost.
have free entry and exit.
obey the law of one price.Correct!
None of the other provided answers is correct.
1 / 1 ptsQuestion 4
Suppose there are 100 firms each with a short run total cost of STC = q + q + 10.
The market supply curve is
2
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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Q = −50 + 50PCorrect! S

it is not possible to find the market supply curve with the information
provided.
Q = −100 + 100PS
Q = −50 + 50PS 2
None of the other provided answers is correct.
1 / 1 ptsQuestion 5
A price-discriminating monopolist having the same constant marginal cost in two
markets should charge a higher price in the market
that has a higher demand.
that has a more elastic demand.
that has a less elastic demand.Correct!
that has a higher marginal revenue.
None of the other provided answers is correct.
1 / 1 ptsQuestion 6
TC = Aq + bq + cq + d. AVC = 3 2
Aq + bq + cq +d/q2
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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Aq + bq + cCorrect! 2
Aq + bq + cq3 2
d
None of the other provided answers is correct.
1 / 1 ptsQuestion 7
If the demand faced by a firm is elastic, selling one more unit of output will
increase revenue.Correct!
decrease revenue.
keep revenues constant.
decrease price.
None of the other provided answers is correct.
1 / 1 ptsQuestion 8
As long as marginal cost is below average cost, average cost will be
decreasing.Correct!
rising.
constant.

changing in a direction that cannot be determined without more
information.
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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None of the other provided answers is correct.
1 / 1 ptsQuestion 9
A monopolist has TC = 0.1Q - 2Q + 100. Market demand is Q = 86 - P. Its profit-
maximising output is
2
92
46
40Correct!
20
None of the other provided answers is correct.
1 / 1 ptsQuestion 10
In the Cournot model, each firm assumes that its rival will ____ its output when the
firm adjusts its own output. Which word best completes the sentence?
increase
not adjustCorrect!
decrease
adjust
None of the other provided answers is correct.
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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1 / 1 ptsQuestion 11
Alastair (A) and Bennett (B) must have their coffee and cream in exact proportions
(each cup is 10 units of coffee per 1 unit cream). They are invited to a weekend long
event (during which they can easily consume 8 cups of coffee). Suppose A is given 8
units of cream and B is given 80 units of coffee. The post trading result (one in which
any trade that makes both parties better off than their initial allocation) will guarantee
each person
nothing
at least 1 cup of properly made coffee.Correct!
at least 2 cups of properly made coffee.
exactly 4 cups of properly made coffee.
None of the other provided answers is correct.
1 / 1 ptsQuestion 12
If Q = K L the marginal product of labour is1/2 1/2
constant
increasing
diminishingCorrect!
none of the other answers is correct
None of the other provided answers is correct.
1 / 1 ptsQuestion 13
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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A production function displays increasing returns to scale. Therefore, the total cost
curve is
a straight line through the origin.
a curve with a positive and continually decreasing slope.Correct!
a curve with a positive and continually increasing slope.
a curve with a negative and continually decreasing slope.
None of the other provided answers is correct.
1 / 1 ptsQuestion 14
A technical innovation in the production of automobiles by Ford Motor Company’s
for 1 million cars per year would necessarily
shift the “1 million car” isoquant away from the origin.
cause 1 million cars to be produced with more capital and less labor.
cause 1 million cars to be produced with more labor and less capital.
None of the other provided answers is correct. Correct!
leave the "1 million car" isoquant where it is.
1 / 1 ptsQuestion 15
The shape of a firm's expansion path depends upon
only the hourly wage.
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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only the hourly capital rental rate.
only the shape of the firm's production function.

the hourly wage, the hourly capital rental rate and the shape of the firm's
production function.
Correct!
None of the other provided answers is correct.
0 / 1 ptsQuestion 16
If demand is inelastic, marginal revenue will be
positive.
zero.ou Answered
negative.orrect Answer
None of the other answers is correct.
minimized.
1 / 1 ptsQuestion 17
Market demand is given by Q = 100 - P and supply is Q = -20 + P. What is the
amount consumers pay to producers?
D S
60
2400Correct!
3600
2020/12/9 Sample practice questions for the Final : ECON5040 Microeconomics for Business
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6400
None of the other provided answers is correct.
1 / 1 ptsQuestion 18
The supply curve for a monopoly is given by
the firm’s marginal cost curve above the average variable cost curve.

the one point on the demand curve that corresponds to the quantity for
which price is equal to marginal cost.

the entire demand curve above the point where price is equal to average
cost.
None of the provided answers is correct.Correct!
the marginal cost curve above the shutdown point.
1 / 1 ptsQuestion 19
Barely Legal Seafoods, a monopolist selling clam chowder, sells two different bowl
sizes, large and small. What strategy should he use to extract the most surplus
possible out of customers who come in two types, regular and big eaters, when he
cannot distinguish between the two types by observation?

Distort the size of the small bowl downward to make it less attractive to the
big eaters, allowing him to raise the price of the large bowl.
Correct!

Distort the size of the large bowl downward to make it attractive to both big
and regular eaters.
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Distort the size of the small bowl upward to make it harder for regular
eaters to separate themselves from big eaters.

Distort the size of the large bowl upward to make big eaters less likely to
consume the small bowl.
None of the other provided answers is correct.