MICRO- ECONOMICS AND BEHAVIOR Seventh Edition

Size: px
Start display at page:

Download "MICRO- ECONOMICS AND BEHAVIOR Seventh Edition"

Transcription

1 MICRO- ECONOMICS AND BEHAVIOR Seventh Edition ROBERT H. FRANK Cornell University McGraw-Hill Irwin Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis Bangkok Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal New Delhi, Santiago Seoul Singapore Sydney Taipei Toronto

2

3

4

5

6 CONTENTS ECONOMIC NATURALIST 10.2: Why Do Unions Support Minimum Wage Laws So Strongly? 315 ECONOMIC NATURALIST 10.3: Why Would a Bathroom Equipment Manager Bake the Image of a Housefly onto the Center of Its Ceramic Urinals? 316 Long-Run Costs and the Structure of Industry 319 The Relationship between Long-Run and Short-Run Cost Curves 321 Summary 322 Questions for Review 323 Problems 323 Answers to In-Chapter Exercises 325 Appendix 10 Mathematical Extensions of the Theory of Costs 327 Chapter 11 Perfect Competition 333 Chapter Preview 333 The Goal of Profit Maximization 334 Example 11.1: Should the Owner of Valdosta, Georgia's, Miniature Golf Course Move the Operation to Manhattan? 335 The Four Conditions for Perfect Competition 337 The Short-Run Condition for Profit Maximization 339 The Short-Run Competitive Industry Supply 343 Example 11.2: What Is the Industry Supply Curve for an Industry with 200 Firms? 344 Short-Run Competitive Equilibrium 344 The Efficiency of Short-Run Competitive Equilibrium 346 Producer Surplus 347 Example 11.3: Should the Legislature Ban Fireworks? 349 Adjustments in the Long Run 350 The Invisible Hand 353 Application: The Cost of Extraordinary Inputs 354 The Long-Run Competitive Industry Supply Curve 356 ECONOMIC NATURALIST I I.I: Why Do Color Photographs Cost Less Than Blackand-White Photographs? 359 The Elasticity of Supply 360 Applying the Competitive Model 361 ECONOMIC NATURALIST 11.2: Why Did I8-Wheel Cargo Trucks Suddenly Begin Using Airfoils in the Mid-1970s? 365 v Summary 366 Questions for Review 367 Problems 367 Answers to In-Chapter Exercises 369 Chapter 12 Monopoly 371 Chapter Preview 371 Defining Monopoly 372 Five Sources of Monopoly 373 The Profit-Maximizing Monopolist 377 Example 12.1: Finding a Marginal Revenue Curve for a Given Demand Curve 383 Example 12.2: What Is a Monopolist's Profit-Maximizing Price, and How Much Economic Profit Is Earned? 385 A Monopolist Has No Supply Curve 388 Adjustments in the Long Run 389

7 CONTENTS Price Discrimination 389 Example 12.3: Finding and Graphing the Monopolist's Quantity and Price in the Home Market 390 ECONOMIC NATURALIST 12.1: Why Do Some Doctors and Lawyers Offer Discounts to People with Low Incomes? 392 ECONOMIC NATURALIST 12.2: Why Do Theater Owners Offer Student Discounts on Admission Tickets but Not on Popcorn? 392 The Efficiency Loss from Monopoly 397 Public Policy toward Natural Monopoly 398 Example 12.4: Will the Monopolist Introduce a New Lightbulb That Lasts 10,000 Hours? 406 Summary 407 Questions for Review 408 Problems 408 Answers to In-Chapter Exercises 410 Chapter 13 imperfect Competition: A Game-Theoretic Approach 413 Chapter Preview 414 An Introduction to the Theory of Games 414 ECONOMIC NATURALIST 13.1: Why Do Cigarette Companies Advertise "Too Much"? 417 ECONOMIC NATURALIST 13.2: Why Might a Company Make an Investment It Knew It Would Never Use? 424 ECONOMIC NATURALIST 13.3: Why Would a Firm Build a Factory with More Capacity Than It Would Ever Need? 426 Some Specific Oligopoly Models 426 Example 13.1: Deriving the Reaction Functions for Cournot Duopolists 429 Example 13.2: Finding the Equilibrium Price and Quantity for Bertrand Duopolists 430 Example 13.3: Finding the Equilibrium Price and Quantity for a Stackelberg Leader and Follower 431 Competition When There Are Increasing Returns to Scale 433 Chamberlin Model of Monopolistic Competition 435 A Spatial Interpretation of Monopolistic Competition 440 ECONOMIC NATURALIST 13.4: Why Are There Fewer Grocery Stores in Cities Than There Were in 1930? Why Do Neighborhoods in Manhattan Have More Grocery Stores Than Neighborhoods in Los Angeles? 445 Historical Note: Hotelling's Hot Dog Vendors 449 Consumer Preferences and Advertising 450 Summary 452 Questions for Review 452 Problems 453 Answers to In-Chapter Exercises 454 PART 4 Factor Markets 457 Chapter 14 Labor 459 Chapter Preview 460 The Perfectly Competitive Firm's Short-Run Demand for Labor 460 The Perfectly Competitive Firm's Long-Run Demand for Labor 462 The Market Demand Curve for Labor 462 An Imperfect Competitor's Demand for Labor 463

8 XXVI CONTENTS The Supply of Labor 464 Example 14.1: The Labor Supply Curve for Someone with a Target Level of Income 466 ECONOMIC NATURALIST 14.1: Why Is It So Hard to Find a Taxi on Rainy Days? 467 Example 14.2: The Optimal Leisure Demand for Someone Who Views Income and Leisure as Perfect Complements 467 Is Leisure a Giffen Good? 469 The Noneconomist's Reaction to the Labor Supply Model 469 The Market Supply Curve 470 Example 14.3: How Do Rising MBA Enrollments Affect the Salaries and Employment of Economists in Liberal Arts Colleges? 470 Monopsony 472 Minimum Wage Laws 476 Labor Unions 478 Discrimination in the Labor Market 480 Statistical Discrimination 482 The Internal Wage Structure 485 Winner-Take-All Markets 488 Summary 489 Questions for Review 490 Problems 490 Answers to In-Chapter Exercises 493 Appendix 14 The Economics of Workplace Safety 497 Chapter 15 Capital 505 Chapter Preview 506 Financial Capital and Real Capital 506 The Demand for Real Capital 506 The Relationship between the Rental Rate and the Interest Rate 507 The Criterion for Buying a Capital Good 508 Interest Rate Determination 508 Real versus Nominal Interest Rates 510 The Market for Stocks and Bonds 510 ECONOMIC NATURALIST 15.1: Why Is Owning Stock in a Monopoly No Better Than Owning Stock in a Perfectly Competitive Firm? 514 The Anomaly of the Investment Newsletter 514 Tax Policy and the Capital Market 516 Economic Rent 517 Peak-Load Pricing 518 Exhaustible Resources as Inputs in Production 519 Summary 521 Questions for Review 522 Problems 522 Answers to In-Chapter Exercises 523 Appendix 15 A More Detailed Look at Exhaustible Resource Allocation 525 PART 5 Externailities, Public Goods, and Welfare 533 Chapter 16 Externalities, Property Rights, and the Coase Theorem 535 Chapter Preview 536 The Reciprocal Nature of Externalities 536

9 CONTENTS xxvii Example 16.1: The Confectioner and the Doctor (I): Making the Confectioner Liable for Noise Damage 537 Example 16.2: The Confectioner and the Doctor (II): Changing Costs and Benefits 538 Example 16.3: The Confectioner and the Doctor (III): Installing a Soundproofing Device 538 Example 16.4: The Confectioner and the Doctor (IV): Should the Doctor Rearrange His Office? 539 Example 16.5: The Confectioner and the Doctor (V): Costly Negotiation When the Confectioner Can Make the Least-Cost Adjustment 540 Example 16.6: The Confectioner and the Doctor (VI): Costly Negotiation When the Doctor Can Make the Least-Cost Adjustment 541 Application: External Effects from Nuclear Power Plants 542 Property Rights 543 ECONOMIC NATURALIST 16.1: Why Does the Law Permit Airlines to Operate Flights over Private Land without Permission 543 ECONOMIC NATURALIST 16.2: Why Does the Law of Trespass Not Apply along Waterfront Property? 544 ECONOMIC NATURALIST 16.3: Why Are Property Rights Often Suspended during Storms? 545 ECONOMIC NATURALIST 16.4: Why Do Building Height Limits Vary from City to City? 545 Example 16.7: If Village Residents Make Their Investment Decisions Independently, How Many of Their Steers Will Graze on the Commons? 546 Externalities, Efficiency, and Free Speech 550 Smoking Rules, Public and Private 550 Example 16.8: Should Smoker Smith Live with Nonsmoker Jones, or Find a Separate Apartment? 551 Positive Externalities 552 Positional Externalities 552 Taxing Externalities 555 Example 16.9: The Confectioner and the Doctor (VII): Taxing the Confectioner for Noise 556 Example 16.10: What Is the Best Way for the City Council to Reduce Air Pollution? 557 Summary 560 Questions for Review 560 Problems 560 Answers to In-Chapter Exercises 566 Chapter 17 Government 567 Chapter Preview 568 Public Goods 568 Example 17.1: Should the Network Broadcast Jerry Springer or Masterpiece Theater? 573 Public Choice 576 Example 17.2: If Two People, One Rich and One Poor, Have Opposite Views on a Proposed Public Project, on What Basis Would Each Like to See the Decision Made, Cost-Benefit Analysis or Majority Rule? 580 Example 17.3: Which Company Will Win the Cedar Rapids Cable TV Franchise? 582

10 xxviii CONTENTS Income Distribution 582 Summary 591 Questions for Review 592 Problems 593 Answers to In-Chapter Exercises 594 Index 597 Chapter I8W General Equilibrium and Market Efficiency (online) 18W-1 Chapter Preview 18W-1 A Simple Exchange Economy 18W-2 Efficiency in Production 18W-10 Efficiency in Product Mix 18W-11 Gains from International Trade 18W-15 Example 18W.1: General Equilibrium and Market Efficiency 18W-16 Taxes in General Equilibrium 18W-16 Other Sources of Inefficiency 18W-18 Summary 18W-20 Questions for Review 18W-20 Problems 18W-21 Answers to In-Chapter Exercises 18W-22

Chapter 13. Oligopoly and Monopolistic Competition

Chapter 13. Oligopoly and Monopolistic Competition Chapter 13 Oligopoly and Monopolistic Competition Chapter Outline Some Specific Oligopoly Models : Cournot, Bertrand and Stackelberg Competition When There are Increasing Returns to Scale Monopolistic

More information

Preface. Chapter 1 Basic Tools Used in Understanding Microeconomics. 1.1 Economic Models

Preface. Chapter 1 Basic Tools Used in Understanding Microeconomics. 1.1 Economic Models Preface Chapter 1 Basic Tools Used in Understanding Microeconomics 1.1 Economic Models 1.1.1 Positive and Normative Analysis 1.1.2 The Market Economy Model 1.1.3 Types of Economic Problems 1.2 Mathematics

More information

MICROECONOMICS. London School of Economics. University of Western Ontario. Prentice Hall FINANCIAL TIMES

MICROECONOMICS. London School of Economics. University of Western Ontario. Prentice Hall FINANCIAL TIMES .&*,- *>"> MICROECONOMICS Saul Estrin London School of Economics David Laidler University of Western Ontario Michael Dietrich University of Sheffield Prentice Hall FINANCIAL TIMES An imprint of Pearson

More information

Problem Set 4 Eco 112, Fall 2011 Chapters covered: Ch. 8 and Ch. 9 (up to slide 15 Price Discrimination) Due date: October 20, 2011

Problem Set 4 Eco 112, Fall 2011 Chapters covered: Ch. 8 and Ch. 9 (up to slide 15 Price Discrimination) Due date: October 20, 2011 Problem Set 4 Eco 112, Fall 2011 Chapters covered: Ch. 8 and Ch. 9 (up to slide 15 Price Discrimination) Due date: October 20, 2011 There are 30 multiple choice questions in this problem set. Answer these

More information

MANAGERIAL ECONOMICS THEORY, APPLICATIONS, AND CASES EIGHTH EDITION. W.Bruce Allen The Wharton School University of Pennsylvania

MANAGERIAL ECONOMICS THEORY, APPLICATIONS, AND CASES EIGHTH EDITION. W.Bruce Allen The Wharton School University of Pennsylvania MANAGERIAL ECONOMICS THEORY, APPLICATIONS, AND CASES EIGHTH EDITION W.Bruce Allen The Wharton School University of Pennsylvania Neil A. Doherty The Wharton School University of Pennsylvania Keith Weigelt

More information

Eco 202 Exam 2 Spring 2014

Eco 202 Exam 2 Spring 2014 Eco 202 Exam 2 Spring 2014 PLEASE ANSWER 50 OF THE FOLLOWING QUESTIONS. 1. Jon Brooks quit his job in a bicycle shop, where he earned $15,000 per year, to become a graduate student in economics. At the

More information

Sharon M. Oster PEARSON

Sharon M. Oster PEARSON ELEVENTH EDITION Principles of Microeconomics GLOBAL EDITION Karl E. Case Wellesley College Ray C. Fair Yale University Sharon M. Oster Yale University PEARSON Boston Columbus Indianapolis New York San

More information

FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

More information

Micro Economics Review

Micro Economics Review Micro Economics Review 1. Intro to Economics a. What is Economics? i. Scarcity and the factors of production 1. Explain why scarcity and choice are basic problems of economics 2. Identify the factors of

More information

AP Microeconomics Review With Answers

AP Microeconomics Review With Answers AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show

More information

College Record: 59.7% 4 year school, 13.1% 2 year school, 9.9% trade school

College Record: 59.7% 4 year school, 13.1% 2 year school, 9.9% trade school Microeconomics SYLLABUS Jason Farone Blackhawk High School Beaver Falls, PA School Profile School Location and Environment: Blackhawk High School is a public school in Beaver Falls, PA, located 50 miles

More information

Intermediate Microeconomic Theory Economics 3070 Summer Introduction and Review: Chapters 1, 2 (plus corresponding study guide)

Intermediate Microeconomic Theory Economics 3070 Summer Introduction and Review: Chapters 1, 2 (plus corresponding study guide) Intermediate Microeconomic Theory Economics 3070 Summer 1994 Professor M.J. Greenwood Office: Econ 208 Office Hours: 3:40-4:20 daily and by appointment A Term COURSE OUTLINE Part I. Text: Robert H. Frank,

More information

SCHOOL DISTRICT OF THE CHATHAMS CURRICULUM

SCHOOL DISTRICT OF THE CHATHAMS CURRICULUM CONTENT AREA(S): Social Studies COURSE/GRADE LEVEL(S): AP Economics/ 10th - 12th Grade I. Course Overview Advanced Placement Economics provides students with a thorough understanding of the principles

More information

Econ 201 Review Notes - Part 3

Econ 201 Review Notes - Part 3 Econ 201 Review Notes - Part 3 This is intended as a supplement to the lectures and section. It is what I would talk about in section if we had more time. After the first three chapters where we talked

More information

Problem Set 6 16 July 2013

Problem Set 6 16 July 2013 Eco 333 Name Problem Set 6 16 July 2013 1. Railway engines create sparks, which sometimes set fire to crops planted near the tracks. A large number of farmers are affected, and transactions costs prevent

More information

2007 NATIONAL ECONOMICS CHALLENGE NCEE/Goldman Sachs Foundation

2007 NATIONAL ECONOMICS CHALLENGE NCEE/Goldman Sachs Foundation 2007 NATIONAL ECONOMICS CHALLENGE NCEE/Goldman Sachs Foundation National Round I: Microeconomics David Ricardo Division 1. If your income tax liability is $15,000 and your income is $60,000, your A. average

More information

2000 AP Microeconomics Exam Answers

2000 AP Microeconomics Exam Answers 2000 AP Microeconomics Exam Answers 1. B Scarcity is the main economic problem!!! 2. D If the wages of farm workers and movie theater employee increase, the supply of popcorn and movies will decrease (shift

More information

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description:

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description: Lecture 24TECO 202 24TPrinciples of Microeconomics COURSE OUTLINE Revised: Fall 2015 Prerequisites: None Course Description: Introduces the basic concepts of microeconomics. Explores the free market concepts

More information

ECON 120 Principles of Microeconomics

ECON 120 Principles of Microeconomics South Central College ECON 120 Principles of Microeconomics Common Course Outline Course Information Description Total Credits 3.00 Total Hours 48.00 Types of Instruction Microeconomics is the study of

More information

ADVANCED PLACEMENT MICROECONOMICS COURSE SYLLABUS

ADVANCED PLACEMENT MICROECONOMICS COURSE SYLLABUS ADVANCED PLACEMENT MICROECONOMICS COURSE SYLLABUS Economics is a way of looking at the choices people make regarding their time, money, and talent. Studying economics shows how goods and services are produced,

More information

Instructions: must Repeat this answer on lines 37, 38 and 39. Questions:

Instructions: must Repeat this answer on lines 37, 38 and 39. Questions: Final Exam Student Name: Microeconomics, several versions Early May, 2011 Instructions: I) On your Scantron card you must print three things: 1) Full name clearly; 2) Day and time of your section (for

More information

SAMPLE MULTIPLE CHOICE FINAL EXAM CHAPTER 6 THE ANALYSIS OF COSTS

SAMPLE MULTIPLE CHOICE FINAL EXAM CHAPTER 6 THE ANALYSIS OF COSTS 1. SAMPLE MULTIPLE CHOICE FINAL EXAM CHAPTER 6 THE ANALYSIS OF COSTS Long-run average cost equals long-run marginal cost whenever a) the production function exhibits constant returns to scale. b) fixed

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason

More information

MICRO EXAM REVIEW SHEET

MICRO EXAM REVIEW SHEET MICRO EXAM REVIEW SHEET 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry 3. Natural Monopoly with Fair-Return

More information

1. Supply and demand are the most important concepts in economics.

1. Supply and demand are the most important concepts in economics. Page 1 1. Supply and demand are the most important concepts in economics. 2. Markets and Competition a. Def: Market is a group of buyers and sellers of a particular good or service. P. 66. b. Def: A competitive

More information

JEFFERSON COLLEGE COURSE SYLLABUS ECO102 MICROECONOMICS. 3 Credit Hours. Prepared by: James Watson. Revised Date: February 2007 by James Watson

JEFFERSON COLLEGE COURSE SYLLABUS ECO102 MICROECONOMICS. 3 Credit Hours. Prepared by: James Watson. Revised Date: February 2007 by James Watson JEFFERSON COLLEGE COURSE SYLLABUS ECO102 MICROECONOMICS 3 Credit Hours Prepared by: James Watson Revised Date: February 2007 by James Watson Arts & Science Education Dr. Mindy Selsor, Dean ECO102 Microeconomics

More information

A TEXTBOOK OF MICROECONOMIC THEORY. Pankaj Tandon. Boston University

A TEXTBOOK OF MICROECONOMIC THEORY. Pankaj Tandon. Boston University A TEXTBOOK OF MICROECONOMIC THEORY Pankaj Tandon Boston University DSAGE j TEXTS www.sagepu bl ications.com London Orth) SlntEpore WMhlnQton DC * Borton CONTENTS Preface About the Author xiii xv Chapter

More information

Micro Semester Review Name:

Micro Semester Review Name: Micro Semester Review Name: The following review is set up to emphasize certain concepts, graphs and terms. It is the responsibility of the individual teachers to emphasize and review the analysis aspects

More information

Chapter 16 Monopolistic Competition. Chapter 17 Oligopoly. Chapter 10 - Externalities. Economics 110 Final Study-guide Fall 2013

Chapter 16 Monopolistic Competition. Chapter 17 Oligopoly. Chapter 10 - Externalities. Economics 110 Final Study-guide Fall 2013 Final Exam Study Questions: (A subset of these questions/concepts will be on the exam. Also, questions on the Midterm #2 study guide that weren t used could also be on the final.) Chapter 16 Monopolistic

More information

Economics 110 Final exam Practice Multiple Choice Qs Fall 2013

Economics 110 Final exam Practice Multiple Choice Qs Fall 2013 Final Exam Practice Multiple Choice Questions - ANSWER KEY Which of the following statements is not correct? a. Monopolistic competition is similar to monopoly because in each market structure the firm

More information

Practice Test for Final

Practice Test for Final Name: Class: Date: Practice Test for Final True/False Indicate whether the statement is true or false. 1. A public good or service can be consumed by paying and nonpaying customers alike. 2. An example

More information

The Economic Way ; of Thinking for Managers

The Economic Way ; of Thinking for Managers The Economic Way ; of Thinking for Managers Second Edition Richard B. McKenzie R. Lee CAMBRIDGE UNIVERSITY PRESS Preface page xv How to use this book -. _.. xxiv List of online perspectives xxvi List of

More information

Chapter 24. Introduction. Learning Objectives. Monopoly

Chapter 24. Introduction. Learning Objectives. Monopoly Chapter 24 Monopoly Introduction States have various licensing requirements for individuals who wish to practice specific professions. For example, Ohio requires a $100 license fee to become a kick boxer.

More information

Microeconomics. Use the graph below to answer question number 3

Microeconomics. Use the graph below to answer question number 3 More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *

More information

MICROECONOMICS SECTION I. Time - 70 minutes 60 Questions

MICROECONOMICS SECTION I. Time - 70 minutes 60 Questions MICROECONOMICS SECTION I Time - 70 minutes 60 Questions Directions: Each of the questions or incomplete statements below is followed by five suggested answers or completions. Select the one that is best

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Sample Test 3 Ch 10-13 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A cost incurred in the production of a good or service and for which

More information

Level 3 Economics, 2015

Level 3 Economics, 2015 91400 914000 3SUPERVISOR S Level 3 Economics, 2015 91400 Demonstrate understanding of the efficiency of different market structures using marginal analysis 2.00 p.m. Wednesday 18 November 2015 Credits:

More information

Monopoly 2. Laugher Curve. The Welfare Loss from Monopoly. The Welfare Loss from Monopoly. Bad things that monopolist do!

Monopoly 2. Laugher Curve. The Welfare Loss from Monopoly. The Welfare Loss from Monopoly. Bad things that monopolist do! Laugher Curve Monopoly 2 Bad things that monopolist do! The First Law of Economics: For every economist, there exists an equal and opposite economist. The Second Law of Economics: They're both wrong. The

More information

Monopolistic Markets. Regulation

Monopolistic Markets. Regulation Monopolistic Markets Regulation Comparison of monopolistic and competitive equilibrium output The profits of a monopolist are maximized when MC(Q M ) = P(Q M ) + Q P (Q M ) negative In a competitive market:

More information

What Is Covered. Econ 2 Final Exam. The Big Concepts. An Outline of Topics Covered In Econ 2

What Is Covered. Econ 2 Final Exam. The Big Concepts. An Outline of Topics Covered In Econ 2 What Is Covered Econ 2 Final Exam Where: Price Center Theatre Date: Friday March 24 Time: 8:00-11:00 a.m. Final is cumulative Heavier emphasis on chapters (14&15) not covered on earlier midterms Format:

More information

Fundamentals of Microeconomics Johns Hopkins University Center for Talented Youth

Fundamentals of Microeconomics Johns Hopkins University Center for Talented Youth Fundamentals of Johns Hopkins University Center for Talented Youth Day Time Topic/Concepts Activity AM Introduction to Introductions, Honor Code, Class Rules and Expectations. Principles of Pre-assessment

More information

Economics Challenge Online State Qualification Practice Test. 1. An increase in aggregate demand would tend to result from

Economics Challenge Online State Qualification Practice Test. 1. An increase in aggregate demand would tend to result from 1. An increase in aggregate demand would tend to result from A. an increase in tax rates. B. a decrease in consumer spending. C. a decrease in net export spending. D. an increase in business investment.

More information

Do not open this exam until told to do so. Solution

Do not open this exam until told to do so. Solution Do not open this exam until told to do so. Department of Economics College of Social and Applied Human Sciences K. Annen, Fall 003 Final (Version): Intermediate Microeconomics (ECON30) Solution Final (Version

More information

Chapter 15: Industrial Organization

Chapter 15: Industrial Organization Chapter 15: Industrial Organization Imperfect Competition Product Differentiation Advertising Monopolistic Competition Oligopoly Collusion Cournot Model Stackelberg Model Bertrand Model Cartel Legal Provisions

More information

MONOPOLY SOLUTIONS TO TEXT PROBLEMS: Quick Quizzes

MONOPOLY SOLUTIONS TO TEXT PROBLEMS: Quick Quizzes 1 MONOPOLY SOLUTIONS TO TEXT PROBLEMS: Quick Quizzes 1. A market might have a monopoly because: (1) a key resource is owned by a single firm; (2) the government gives a single firm the exclusive right

More information

UNIVERSITY OF HAWAIÌI AT MÂNOA Department of Economics

UNIVERSITY OF HAWAIÌI AT MÂNOA Department of Economics UNIVERSITY OF HAWAIÌI AT MÂNOA Department of Economics Spring 2010 Course Syllabus ECON 130 (Section 002) Principles of Microeconomics http://laulima.hawaii.edu http://www.aplia.com Aplia Course Key: 3QX5-E3HR-KZHG

More information

ECO2003F. Katherine Eyal. Chapter 12. Factor Markets: Labour

ECO2003F. Katherine Eyal. Chapter 12. Factor Markets: Labour ECO2003F Katherine Eyal Chapter 12 Factor Markets: abour 1 Abbreviations used in these slides. Please DON'T use them in your exam use the full versions. VMP = value marginal product of labour MRP = marginal

More information

AP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology

AP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology St. Michael Albertville High School Teacher: Matthew Rooker AP Microeconomics October 2014 Content Skills Learning Targets Assessment Resources & Technology November 2014 Content Skills Learning Targets

More information

14.01 Principles of Microeconomics, Fall 2007 Chia-Hui Chen November 7, Lecture 22

14.01 Principles of Microeconomics, Fall 2007 Chia-Hui Chen November 7, Lecture 22 Monopoly. Principles of Microeconomics, Fall Chia-Hui Chen November, Lecture Monopoly Outline. Chap : Monopoly. Chap : Shift in Demand and Effect of Tax Monopoly The monopolist is the single supply-side

More information

14.23 Government Regulation of Industry

14.23 Government Regulation of Industry 14.23 Government Regulation of Industry Class 2 MIT & University of Cambridge 1 Outline Definitions Perfect Competition and Economic Surplus Monopoly and Deadweight Losses Natural Monopolies X-inefficiency

More information

Object-Oriented & Classical Soft Engineering

Object-Oriented & Classical Soft Engineering Object-Oriented & Classical Soft Engineering Seventh Edition Stephen R. Schach Vanderbilt University Higher Education Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis Bangkok Bogota Caracas

More information

Monopolistic Competition. Chapter 17

Monopolistic Competition. Chapter 17 Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic

More information

JEFFREY M. PERLOFF PEARSON

JEFFREY M. PERLOFF PEARSON MICROECONOMICS SEVENTH EDITION GLOBAL EDITION JEFFREY M. PERLOFF University of California, Berkeley «PEARSON Boston Columbus Indianapolis New York San Francisco Hoboken Amsterdam Cape Town Dubai London

More information

LAHORE UNIVERSITY OF MANAGEMENT SCIENCES SULEMAN DAWOOD SCHOOL OF BUSINESS. MECO 111 Principles of Microeconomics. Dr. Bushra Naqvi COURSE OUTLINE

LAHORE UNIVERSITY OF MANAGEMENT SCIENCES SULEMAN DAWOOD SCHOOL OF BUSINESS. MECO 111 Principles of Microeconomics. Dr. Bushra Naqvi COURSE OUTLINE LAHORE UNIVERSITY OF MANAGEMENT SCIENCES SULEMAN DAWOOD SCHOOL OF BUSINESS MECO 111 Principles of Microeconomics Dr. Bushra Naqvi COURSE OUTLINE ACF Fall 2011/12 Instructor: Dr. Bushra Naqvi Email: Bushra.Naqvi@lums.edu.pk

More information

Chapter 12. Monopoly. Chapter Outline. Key Ideas. Key Ideas. Introducing a New Market Structure. Evidence-Based Economics Example 11/25/2016

Chapter 12. Monopoly. Chapter Outline. Key Ideas. Key Ideas. Introducing a New Market Structure. Evidence-Based Economics Example 11/25/2016 Chapter 12 Modified by Chapter Outline 1. Introducing a New Market Structure 2. 3. 4. Choosing the Optimal Quantity and Price 5. The "Broken" Invisible Hand: The Cost of 6. 7. Government Policy toward

More information

S11Microeconomics, Exam 3 Answer Key. Instruction:

S11Microeconomics, Exam 3 Answer Key. Instruction: S11Microeconomics, Exam 3 Answer Key Instruction: Exam 3 Student Name: Microeconomics, several versions Early May, 2011 Instructions: I) On your Scantron card you must print three things: 1) Full name

More information

Eight Labor Market Models - SUMMARY

Eight Labor Market Models - SUMMARY Eight Labor Market Models - SUMMARY 1 Eight Labor Market Models 1. Competitive labor market in a competitive product market 2. Competitive labor market in an imperfectly competitive product market 3. Monopsony

More information

Section I (20 questions; 1 mark each)

Section I (20 questions; 1 mark each) Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

More information

Ten Principles of Economics

Ten Principles of Economics Wojciech Gerson (1831-1901) Seventh Edition Principles of Economics N. Gregory Mankiw CHAPTER 1 Ten Principles of Economics In this chapter, look for the answers to these questions What kinds of questions

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct? A) Consumers have the ability to buy everything

More information

NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Final Exam December 8, 2006

NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Final Exam December 8, 2006 NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Section I: Multiple Choice (4 points each) Identify the choice that best completes the statement or answers the question. 1. The slope

More information

GLOBAL. Microeconomics ELEVENTH EDITION. Michael Parkin EDITION

GLOBAL. Microeconomics ELEVENTH EDITION. Michael Parkin EDITION GLOBAL EDITION Microeconomics ELEVENTH EDITION Michael Parkin Microeconomics, Global Edition - PDF - PDF - PDF Table of Contents Cover Microeconomics About the Author Brief Contents Alternative Pathways

More information

FINAL EXAMINATION ECON 200 Spring 2009 Version B DAY AND TIME YOUR SECTION MEETS:

FINAL EXAMINATION ECON 200 Spring 2009 Version B DAY AND TIME YOUR SECTION MEETS: FINAL EXAMINATION ECON 200 Spring 2009 Version B STUDENT'S NAME: STUDENT'S IDENTIFICATION NUMBER: DAY AND TIME YOUR SECTION MEETS: BEFORE YOU BEGIN PLEASE MAKE SURE THAT YOUR EXAMINATION HAS BEEN DUPLICATED

More information

ECON December 4, 2008 Exam 3

ECON December 4, 2008 Exam 3 Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly

More information

ADVANCED PLACEMENT MICROECONOMICS Maple Grove Senior High School Jeff Rush Social Studies Department

ADVANCED PLACEMENT MICROECONOMICS Maple Grove Senior High School Jeff Rush Social Studies Department ADVANCED PLACEMENT MICROECONOMICS Maple Grove Senior High School Jeff Rush rushj@district279.org Social Studies Department Required textbook Economics, McConnell and Brue, 17 th edition, 2008. Course description

More information

Microeconomics PRINCIPLES, APPLICATIONS, AND TOOLS 6TH EDITION. Lewis and Clark College. University of California, Davis

Microeconomics PRINCIPLES, APPLICATIONS, AND TOOLS 6TH EDITION. Lewis and Clark College. University of California, Davis Microeconomics PRINCIPLES, APPLICATIONS, AND TOOLS 6TH EDITION Lewis and Clark College University of California, Davis California State University, Sacramento Boston Columbus Indianapolis New York San

More information

Chapter 28 The Labor Market: Demand, Supply, and Outsourcing

Chapter 28 The Labor Market: Demand, Supply, and Outsourcing Chapter 28 The Labor Market: Demand, Supply, and Outsourcing Learning Objectives After you have studied this chapter, you should be able to 1. define marginal factor cost, marginal physical product of

More information

ECON 230D2-002 Mid-term 1. Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

ECON 230D2-002 Mid-term 1. Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ECON 230D2-002 Mid-term 1 Name Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Scenario 12.3: Suppose a stream is discovered whose

More information

Wallingford Public Schools - HIGH SCHOOL COURSE OUTLINE

Wallingford Public Schools - HIGH SCHOOL COURSE OUTLINE Wallingford Public Schools - HIGH SCHOOL COURSE OUTLINE Course Title: Advanced Placement Economics Course Number: 3552 Department: Social Studies Grade(s): 11-12 Level(s): Advanced Placement Credit: 1

More information

INSTITUTE OF ACTUARIES OF INDIA

INSTITUTE OF ACTUARIES OF INDIA INSTITUTE OF ACTUARIES OF INDIA EXAMINATIONS 2 nd November 2015 Subject CT7 Business Economics Time allowed: Three Hours (10.30 to 13.30 Hrs.) Total Marks: 100 INSTRUCTIONS TO THE CANDIDATES 1. Please

More information

Essential Questions Content Skills Assessments Standards/PIs Resources/Notes. Discriminates between scarcity and shortage.

Essential Questions Content Skills Assessments Standards/PIs Resources/Notes. Discriminates between scarcity and shortage. Map: AP Economics Type: Consensus Grade Level: 12 School Year: 2010-2011 Author: Jessica Cartusciello District/Building: Island Trees/Island Trees High School Created: 06/28/2010 Last Updated: 07/22/2010

More information

Imperfect Competition (Monopoly) Chapters 15 Mankiw

Imperfect Competition (Monopoly) Chapters 15 Mankiw Imperfect Competition (Monopoly) Chapters 15 Mankiw What did we learn one week ago? Regulated prices Effect of a ceiling price Effect of a floor price. The cost of taxes and subsidies. Tax on producers

More information

13 C H A P T E R O U T L I N E

13 C H A P T E R O U T L I N E PEARSON PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N CASE FAIR OSTER Prepared by: Fernando Quijano w/shelly Tefft 2of 37 PART III MARKET IMPERFECTIONS AND THE ROLE OF GOVERNMENT Monopoly

More information

Econ 2113: Principles of Microeconomics. Spring 2009 ECU

Econ 2113: Principles of Microeconomics. Spring 2009 ECU Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total

More information

Monopoly and How It Arises

Monopoly and How It Arises Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing

More information

Econ Microeconomic Analysis and Policy

Econ Microeconomic Analysis and Policy ECON 500 Microeconomic Theory Econ 500 - Microeconomic Analysis and Policy Monopoly Monopoly A monopoly is a single firm that serves an entire market and faces the market demand curve for its output. Unlike

More information

The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market.

The competition in monopolistically competitive markets is most likely a result of having many sellers in the market. Chapter 16 Monopolistic Competition TRUE/FALSE 1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market. ANS: T 2. The "monopoly" in monopolistically

More information

ECON 115. Industrial Organization

ECON 115. Industrial Organization ECON 115 Industrial Organization 1. Linear (3rd Degree) Price Discrimination First Hour QUIZ Second Hour Introduction to Price Discrimination Third-degree price discrimination Two Rules Examples of price

More information

Ten Principles of Economics

Ten Principles of Economics C H A P T E R 1 Ten Principles of Economics Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2009 South-Western, a part of Cengage Learning, all rights reserved

More information

Perfect Competition. Chapter 7 Section Main Menu

Perfect Competition. Chapter 7 Section Main Menu Perfect Competition What conditions must exist for perfect competition? What are barriers to entry and how do they affect the marketplace? What are prices and output like in a perfectly competitive market?

More information

VIII 1 TOPIC VIII: MONOPOLY AND OTHER INDUSTRY STRUCTURES. I. Monopoly - Single Firm With No Threat of Close Competition. Other Industry Structures

VIII 1 TOPIC VIII: MONOPOLY AND OTHER INDUSTRY STRUCTURES. I. Monopoly - Single Firm With No Threat of Close Competition. Other Industry Structures TOPIC VIII: MONOPOLY AND OTHER INDUSTRY STRUCTURES I. Monopoly - Single Firm With No Threat of Close Competition II. Other Industry Structures CONCEPTS AND PRINCIPLES MONOPOLY We now consider the opposite

More information

JANUARY EXAMINATIONS 2008

JANUARY EXAMINATIONS 2008 No. of Pages: (A) 9 No. of Questions: 38 EC1000A micro 2008 JANUARY EXAMINATIONS 2008 Subject Title of Paper ECONOMICS EC1000 MICROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates

More information

Monopoly. The single seller or firm referred to as a monopolist or monopolistic firm. Characteristics of a monopolistic industry

Monopoly. The single seller or firm referred to as a monopolist or monopolistic firm. Characteristics of a monopolistic industry Monopoly Monopoly: a market structure in which there is only one seller of a good or service that has no close substitutes and entry to the market is completely blocked. The single seller or firm referred

More information

Index. Cambridge University Press A Short Course in Intermediate Microeconomics with Calculus Roberto Serrano and Allan M.

Index. Cambridge University Press A Short Course in Intermediate Microeconomics with Calculus Roberto Serrano and Allan M. adverse selection, 361, 363 Akerloff, G., 360 allocation competitive equilibrium allocation, 275 feasible allocation, 266, 267, 275 nonfeasible allocation, 268 Arrow, K., 272 asymmetric information, 359,

More information

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Name Seat Assignment ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION November 17, 2009 FORM 3. Directions 1. FILL IN YOUR SCANTRON WITH YOUR UNIQUE ID AND THE FORM NUMBER LISTED ON THIS

More information

Economics 500: Microeconomic Theory

Economics 500: Microeconomic Theory Economics 500: Microeconomic Theory State University of New York at Binghamton Department of Economics Problem Set #12 Answers 1. The Coase Theorem says that efficiency in resource allocation will result

More information

Economics 101 Midterm Exam #2. April 9, Instructions

Economics 101 Midterm Exam #2. April 9, Instructions Economics 101 Spring 2009 Professor Wallace Economics 101 Midterm Exam #2 April 9, 2009 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not

More information

Short run and long run price and output decisions of a monopoly firm,

Short run and long run price and output decisions of a monopoly firm, 1 Chapter 1-Theory of Monopoly Syllabus-Concept of imperfect competition, Short run and long run price and output decisions of a monopoly firm, Concept of a supply curve under monopoly, comparison of perfect

More information

CHAPTER 12 Pricing CHAPTER OUTLINE

CHAPTER 12 Pricing CHAPTER OUTLINE CHAPTER 12 Pricing CHAPTER OUTLINE 12.1 Why and How Firms Price Discriminate Why Price Discrimination Pays Who Can Price Discriminate Preventing Resales Not All Price Differences Are Price Discrimination

More information

AP Economics Final Exam Krugman2014v1

AP Economics Final Exam Krugman2014v1 AP Economics Final Exam Krugman2014v1 Multiple Choice Identify the choice that best completes the statement or answers the question. Module 1 1. Scarcity in economics means: 2 2. Suppose people in households

More information

Chapter 7: Market Structures

Chapter 7: Market Structures SCHS SOCIAL STUDIES What you need to know UNIT THREE 1. Describe 4 conditions that are in place for a perfectly competitive market 2. Describe and give characteristics of a monopoly 3. Describe and give

More information

Oligopoly. Quantity Price(per year) 0 $120 2,000 $100 4,000 $80 6,000 $60 8,000 $40 10,000 $20 12,000 $0

Oligopoly. Quantity Price(per year) 0 $120 2,000 $100 4,000 $80 6,000 $60 8,000 $40 10,000 $20 12,000 $0 Oligopoly 1. Markets with only a few sellers, each offering a product similar or identical to the others, are typically referred to as a. monopoly markets. b. perfectly competitive markets. c. monopolistically

More information

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Name Seat Assignment ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION November 17, 2009 FORM 1. Directions 1. FILL IN YOUR SCANTRON WITH YOUR UNIQUE ID AND THE FORM NUMBER LISTED ON THIS

More information

3. At the price of $60 each, sellers offer and buyers wish to purchase pairs of jeans a day. A. 60; 20 B. 8; 24 C. 16; 16 D. 24; 8

3. At the price of $60 each, sellers offer and buyers wish to purchase pairs of jeans a day. A. 60; 20 B. 8; 24 C. 16; 16 D. 24; 8 EC201 Exam II Review 1. Ingrid has been waiting for the show "Mamma Mia!" to come to town. When it finally does come, ticket prices are $60. Ingrid's reservation price is $75. But when Ingrid tries to

More information

Chapter 7: Market Structures Section 2

Chapter 7: Market Structures Section 2 Chapter 7: Market Structures Section 2 Objectives 1. Describe characteristics and give examples of a monopoly. 2. Describe how monopolies, including government monopolies, are formed. 3. Explain how a

More information

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013 UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013 Pricing with market power and oligopolistic markets (PR 11.1-11.4 and 12.2-12.5) Module 4 Sep. 28, 2013

More information

Edexcel (A) Economics A-level

Edexcel (A) Economics A-level Edexcel (A) Economics A-level Theme 3: Business Behaviour & the Labour Market 3.4 Market Structures 3.4.5 Monopoly Notes Characteristics of monopoly: Monopolies can be characterised by: o Profit maximisation.

More information

Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics

Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics Annual Examination 1997 Time allowed: 3 hours Marks: 100 Maximum 1) Attempt any five questions. 2) All questions

More information

Chapter 14 Oligopoly and Monopoly

Chapter 14 Oligopoly and Monopoly Economics 6 th edition 1 Chapter 14 Oligopoly and Monopoly Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall 2017 Oligopoly: a very different market structure

More information

Economics 101A (Lecture 19) Stefano DellaVigna

Economics 101A (Lecture 19) Stefano DellaVigna Economics 101A (Lecture 19) Stefano DellaVigna November 3, 2009 Outline 1. Market Equilibrium in The Long-Run II 2. Profit Maximization: Monopoly 3. Price Discrimination 4. Oligopoly? 1 Market Equilibrium

More information