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Final Exam--Answer Key for Practice Exam #2

Multiple choice answers

 1.c  6.c 11.d 16.c 21.d 26.c 31.e 36.c
 2.d  7.d 12.b 17.c 22.e 27.c 32.a 37.a
 3.a  8.d 13.c 18.d 23.a 28.e 33.e 38.d
 4.c  9.a 14.a 19.a 24.c 29.a 34.a 39.b
 5.e 10.e 15.b 20.e 25.e 30.b 35.d 40.a

Problem section

Part A:

Final-F91-Fig.gif (9993 bytes)
  1. See the figure.
  2. See the figure.
  3. Monopoly price = 9
    Monopoly output = 3
  4. AC(3) = 3
  5. Monopoly profit = 18
  6. Consumer surplus = 4.5
  7. Welfare = 22.5

Part B:

  1. Competitive price = 8
  2. Competitive output = 4
  3. AC(4) = 4
  4. Competitive profit = 16
  5. Consumer surplus = 8
  6. Welfare = 24
  7. Deadweight loss of monopoly = 1.5