Benkyou

19. 19. Suppose all individuals are identical, and their monthly demand for internet access from a certain leading provider can be represented as p=5-(1/2)q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. Potential consumer surplus equals

• $32

• $16

• $8

• $24

• $4

20. 20. Suppose all individuals are identical, and their monthly demand for internet access from a certain leading provider can be represented as p=5-(1/2)q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. The profit-maximizing two-part tariff yields total revenue of

• $32

• $40

• $24

• $16

• $8

21. 21.Suppose all individuals are identical, and their monthly demand for internet access from a certain leading provider can be represented as p=5-(1/2)q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. The profit-maximizing two-part tariff yields results in the firm selling

• 8 hours

• 5 hours

• 10 hours

• 4.5 hours

• 6.5 hours

which of the following statements is correct?

• A competitive firm's optimal output Q* is determined by MR (Q*)=MC(Q*).

• The single price charged by monopoly is greater

• When monopoly practices perfect price discrimination, marginal consumer's valuation equals to the marginal cost of the last unit.

• All the above statements are correct

If the demand for a firm¹s output is perfectly elastic, then the firm's Lerner Index equals

• 1
• 0.5
• infinity

• 0

The introduction of satellite television systems would cause the Lerner Index for cable television to

• become smaller

• increase

• change in accordance to the increase in market power of cable TV providers

• be unchanged

The more block prices a monopoly can set instead of setting a single price, the

• smaller the deadweight loss

• the more producer surplus

• the larger the total welfare

• All of the above

Monopoly results in a deadweight loss because

• the monopolist makes a positive economic profit

• The monopolist wishes to maximize profit.

• Marginal consumer's willingness to pay is larger than marginal cost of the last unit output.

• Marginal consumer's willingness to pay is smaller than marginal cost of the last unit output

Adverse selection occurs when

• a person is selfish

• a person buys life insurance because he has a risky lifestyle that is not known to the life insurance company

• a person is a risk lover

• A women makes more doctor visits than before when she gets pregnant

The inverse demand function facing a monopoly is P=100-Q/2. The monopoly's marginal cost is constant at 60. Suppose the government wishes to eliminate the deadweight loss by controlling the price. What is the price ceiling the government should set?

A) $60 B) $80 C) $50 D) $40

Suppose the government wishes to eliminate the deadweight loss by giving subsidy to the monopoly. How much subsidy should the government offers?

A) $50 B) $40 C) $30 D) $20

• A-B

• C-A

• D-C

• B-B