ECON 2101 Lecture Notes - Lecture 1: Productive Efficiency, Allocative Efficiency

Figure: Consumer Surplus II Price D 0 10 20 30 40 50 60 Quantity 9. (Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good decreases from $2 to $1, consumer surplus will increase by: A) $5. B) $10. C) $25. D) $35.

Question 13: Find the monopolist's equilibrium quantity

Question 14: What is the equilibrium price?

Question 15: What is the firm's fixed cost?

1. I have $100,000 that I want to invest. My financial adviser has suggested either

(1) a municipal bond that matures in 2027 and pays a 9% annual return,

(2) gold bullion, or

(3) an actively managed stock mutual fund that generated a 12% return in 2016. For each of these investment alternatives, discuss why you think the alternative would be a "good" or "bad" investment opportunity for me.