Principles of Economics

Question #1: Draw a perfectly inelastic supply curve.

Question #2: If elasticity of demand is 0.5 and price is lowered from $20 to $19, by what percentage will quantity demanded rise?

Question #3: (a) Illustrate a tax increase. (b) State what happens to equilibrium price and quantity m price and quantity.

Question #4: If the price of eye surgery falls by 50-percent and the quantity of contact lenses demanded falls by 25-percent, find the cross-price elasticity of demand for theses two goods.

Question #6: How much is the firm's most efficient output?

Question #7: At an output of 9, MC = 20 and AVC = $25. At an output of 10, MC =$32 and AVC = $26. What is the lowest price the firm will accept in the short-run?

Question #8: The perfect competitor operates at the __________________ point of his or her average total cost curve in the long-run.

Question #9: A monopoly is a firm that has ____________________substitutes.

Question #10: The five barriers to entering a monopolized industry are:

Question #11: There are basically only two justifications for monopolies:

Question #12: The main economic criticism of monopolies and big business in general is that they are ______________.

Question #13: Price discrimination occurs when a seller charges_______________ for the same good or service.

Question #14: The monopolistic competitor's demand curve slopes__________________.

Question #15: U.S. Steel and a few cigarette companies were all engage in__________________ to attain their economic ends.

Question #16: The oligopolist _____________ at the minimum point of his or her ATC curve.

Question #17: The most important cartel in the world today is_____________________.