Questions 35 to 36 refer to the graph below.
- If this firm were a profit-maximizing monopo-
list, the price and output would be which of the
following?
(A) 0a and Q 1
(B) 0c and Q 1
(C) 0e and Q 1
(D) 0e and Q 2
(E) 0f and Q 1- Deadweight loss is equal to which of the follow-
ing areas?
(A) abcd
(B) cdfg
(C) 0abQ 1
(D)Q 1 Q2gh
(E) bdghTwo competing firms are deciding whether to enter a
new market or maintain the status quo. Use the fol-
lowing profit matrix to respond to question 37.
FIRM X
Enter Market Status Quo
X: $3 X: $1
Enter million million
Market Y: $3 Y: $6FIRM Y
million million
Status X: $6 X: $5
Quo million million
Y: $1 Y: $5
million million- If these firms do not collude, the outcome will be
(A) both firms maintain the status quo.
(B) both firms enter the market.
(C) Firm X enters the market and Firm Y main-
tains the status quo.
(D) Firm Y enters the market and Firm X main-
tains the status quo.
(E) both firms alternate between entering the
market and maintaining the status quo.- When the marginal product of labor is equal to
the average product of labor,
(A) marginal product of labor is at its maxi-
mum.
(B) marginal cost of production is at its mini-
mum.
(C) marginal cost is equal to minimum average
variable cost.
(D) average total cost is at its minimum.
(E) total product of labor is at its maximum.Questions 39 to 41 refer to the graph below.- The area 0abQis equal to
(A) total cost.
(B) total variable cost.
(C) total fixed cost.
(D) marginal cost.
(E) average product of labor.- The curve labeled 1 represents which of the
following?
(A) Marginal cost
(B) Marginal product of labor
(C) Average total cost
(D) Average variable cost
(E) Average fixed cost1
234Qafc dbg
ehOutput$0Marginal Cost
Average Total CostQ 1afc d
begOutput$0DemandMarginal Revenue
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