CAS EC 101 Study Guide - Midterm Guide: Average Variable Cost, Monopolistic Competition, Fixed Cost
ECON 101: Introductory Microeconomic Analysis
SECOND MIDTERM EXAM, Version 2
November 10, 2017
This exam contains 30 multiple choice questions. Identify the letter of the choice that best completes the
statement or answers the question. Each question is worth an equal number of points.
Be sure to answer questions on the bubble answer sheet provided. Any questions answered on the test
question sheets will not be counted.
Calculators are allowed.
_______________________________________________
Please write your name on the test sheet and on the bubble sheet.
VERY IMPORTANT: Write “2” in the space provided on the bubble sheet to indicate the version of
your exam.
Both the test sheet and the bubble sheet must be turned in at the end of the exam.
_______________________________________________
Figure 12-4
Figure 12-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive
market.
1. Refer to Figure 12-4. If the market price is $30, should the firm represented in the diagram
continue to s produce?
a. Yes, because it is covering part of its fixed cost.
b. No, it should shut down because it cannot cover its variable cost.
c. No, it should shut down because it is making a loss.
d. Yes, because it is making a profit.
Figure 15-1
Figure 15-1 above shows the demand and cost curves facing a monopolist.
2. Refer to Figure 15-1. The firm's profit-maximizing price is
a.
P1.
b. P2.
c.
P3.
d.
P4.
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Document Summary
Identify the letter of the choice that best completes the statement or answers the question. Each question is worth an equal number of points. Be sure to answer questions on the bubble answer sheet provided. Any questions answered on the test question sheets will not be counted. Please write your name on the test sheet and on the bubble sheet. Very important: write 2 in the space provided on the bubble sheet to indicate the version of your exam. Both the test sheet and the bubble sheet must be turned in at the end of the exam. Figure 12-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market: refer to figure 12-4. Figure 15-1 above shows the demand and cost curves facing a monopolist: refer to figure 15-1. The firm"s profit-maximizing price is: p1, p2, p3, p4. Suppose the prevailing price is p1 and the firm is currently producing its loss-minimizing quantity.
