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Micro Unit 4 Practice Sheet

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Cалават Рысаков
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769 views

Micro Unit 4 Practice Sheet

Uploaded by

Cалават Рысаков
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Microeconomics

Unit 4 Practice Sheet


Part 1: Monopoly-​ ​Use the graph of a
non-price discriminating monopoly to
answer the following questions. Show
your work when asked to calculate.
1. Identify the profit maximizing price and
quantity.

2. Calculate the total revenue at the profit


maximizing price and quantity.

3. Calculate the total cost at the profit


maximizing price and quantity.

4. Calculate the profit or loss at the profit


maximizing price and quantity.

5. Calculate the area of deadweight loss.

6. Identify the socially optimal


(allocatively efficient) price and
quantity.

7. Identify the price and quantity where


the total revenue is maximized.

8. At the price of $120, is the demand relatively elastic, relatively inelastic, or unit elastic? Why?

9. Identify the price and quantity if this monopoly’s fixed costs increase by $140.

10. Identify the profit maximizing price and quantity if the government levies a $30 per unit tax on this
monopoly.

11. Identify the profit maximizing price and quantity if this monopoly figures out a way to perfectly price
discriminate.

12. Assume instead that the costs of production changed for this monopoly so that the marginal cost (MC)
and average total cost (ATC) for every unit was $80. ​Under these new circumstances, identify the
profit maximizing price and quantity.

13. Calculate the new total revenue at the profit maximizing price and quantity.

14. Calculate the new total cost at the profit maximizing price and quantity.

15. Calculate the new profit or loss at the profit maximizing price and quantity.

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Teachers- Do NOT use this in your classroom. ​Contact me​ if you want to use this resource with your students
Microeconomics
Unit 4 Practice Sheet
Part 2: Monopolistic Competition-​ ​Use
the graph below to answer the following
questions.
16. Identify the profit maximizing price
and quantity.

17. Calculate the total revenue at the


profit maximizing price and quantity.

18. Calculate the profit or loss at the


profit maximizing price and quantity.

19. Will the number of firms in the


industry increase, decrease, or stay
the same in the long run? Explain.

20. Assume the demand decreased.


Would profit increase, decrease, or
stay the same in the long run?
Explain.

21. Is this firm experiencing economies of scale at the profit maximizing quantity? Explain.

Part 3: Oligopoly-​ ​Use the payoff matrix showing two


movie studios, DS and MS, to answer the questions.
22. If both DS and MS make Rated R movies, how much
profit will each firm earn?

23. Does DS have a dominant strategy? If so, what is it?

24. Does MS have a dominant strategy? If so, what is it?

25. Given this information, is there a Nash equilibrium? If


so, what will each firm decide to do?

26. Assume instead that these firms decide to collude to maximize profit. What will each firm decide to do?

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Teachers- Do NOT use this in your classroom. ​Contact me​ if you want to use this resource with your students
Microeconomics
Unit 4 Practice Sheet
Part 4- FRQ Practice-​ Complete the following question from the 2019 AP exam (Question 1).

© Copyright Jacob Clifford 2020. ​Ultimate Review Packet


Teachers- Do NOT use this in your classroom. ​Contact me​ if you want to use this resource with your students

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