ECO 365 Week 5 Final Exam (Latest - August 2015)

Jun 27th, 2016
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1). The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will: Exceed the marginal cost of diamonds but equal to the average total cost of diamonds. Exceed both the marginal cost and the average total cost of diamonds. Be equal to the marginal cost of diamonds. Be equal to the average total cost of diamonds. 2). Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by: Economies of scope Diseconomies of scale Diminishing marginal productivity Economies of scale 3). Suppose that college tuition is higher this year than last and that more students are enrolled in college this year than last year. Based on this information, we can best conclude that: despite the increase i

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ECO 365 Week 5 Final Exam (Latest - August 2015)1). The DeBeers company is a profit-maximizing monopolist that exercises monopoly power inthe distribution of diamonds. If the company earns positive economic profits this year, the priceof diamonds will:Exceed the marginal cost of diamonds but equal to the average total cost of diamonds.Exceed both the marginal cost and the average total cost of diamonds.Be equal to the marginal cost of diamonds.Be equal to the average total cost of diamonds.2). Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250workers and 25 machines, the firm produces 21,000 units of output. These facts are bestexplained by:Economies of scopeDiseconomies of scaleDiminishing marginal productivityEconomies of scale3). Suppose that college tuition is higher this year than last and that more students are enrolled incollege this year than last year. Based on this information, we can best conclude that:despite the increase in price, quantity demanded rose due to some other factors changing.the demand for a college education is positively sloped.the law of demand is invalid.this situation has nothing to do with the law of demand.4). A monopoly firm is different from a perfectly competitive firm in that:A monopolists demand curve is perfectly inelastic whereas a perfectly competitive firmsdemand curve is perfectly elastic.A competitive firm has a u-shaped average cost curve whereas a monopolist does n

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