Microeconomics 2017

The second Gossen's law states that consumer's utility is the highest when (mark one answer):

The total utilities from consumption of each of the goods are equal

The marginal utilities from consumption of each of the goods are equal

The total utilities from consumption of each of the goods divided by their prices are equal

The marginal utilities from consumption of each of the goods divided by their prices are equal

A firm produses 4000 units selling them at a fixed market price which equals 22 zł/unit. At this level of production firm's average costs are equal to 15 zł/unit and marginal costs are equal to 19zł/unit. Assuming that the function of marginal costs is increasing, this means that:

The firm incurs losses and should decrease the production level

The firm incurs losses and should increase the level of production

The firm makes profits but it should increase the level of production

The firm makes profits but it should decrease the level of production

None of the answers

Which of the following statements about monopolies (facing a decreasing linear demand function) are always true?

Monopolies always make positive profits

If monopolist produces the optimal level of production then marginal cost is smaller than the price

Monopolies face no constraints on the price - they can set it as high as possible and will always be able to sell the product

The quantity produced by monopoly is smaller than would be prodiced if the monopoly was split into a group of smaller, competing companies.

Cross elasticity of demand for a product with respect to the price of some other product equals 3. This means that products are:

Substitutes

Complementary

Neutral

None of mentioned

Engel's law says that (mark one)

After his incomes increase, consumer starts buying goods which he considers to be inferior

The higher the price of a good the more preferred it is by the consumer

When consumer's incomes go up, he buys more normal goods, but the share of expenditures for those goods in the whole budget decreases

Consumer buys more normal goods once they become cheaper

Which of the listed situations could to the increase in the equilibrium quantity of fabric softeners in the competitive market (mark all answers which could lead to increase of the price)

Information in the press reveal that fabric softeners are harmful for the skin

Plastic containers for fabric softeners became more expensive

Consumer's incomes went up but at the same time the price of substances used to produce the softeners went down

Prices of washing machines decreased but at the same time a new tax paid by the producers was introduced

One consumer decided to spend 200zł monthly to buy two commodities: meat (25zł/kg) and CD's (40zł/unit). One day the meat's price went down to 20zł/kg and CD's price went up to 50zł/unit. By how much should the consumer's budget change so that he could afford buying all the consumption bundles which were available to him before the prices changed?

By winner's curse we understand a situation in which (mark one)

A firm which should have won the auction, loses it because of offering a price which is too low

One firm wins all the auctions

One firm is unable to win any auction because of the collusion of other competitors

A firm which won in the auction overpaid for the object bought

By opportunity costs we understand (mark one)

Lost profits; the firm would have made them if it had made a different decision

Lost costs; the firm would have suffered them if it had made a different decision

Special reserve which has to be kept by firms in case of unpredicted losses

Expenditures which the company had to cover because of unpredicted events

A Rawlsian welfare function is a social welfare function in case of which (mark one)

The welfare of the society is equal to the maximum of utilities of all society's members

The welfare of society is the weighted sum of utilities of all society's members

The welfare of society is the equal to the utility of one person (dictator)

The welfare of society is equal to the minimum of utilities of all society's members

In a merket there are hundreds of suppliers and 4 buyers (each having a similar market share), which kind of market is it? (mark one

Four bidders A,B,C,D participated in a Vickrey action. The bids were bA=23, bB=15, bC=31, bD=29. Fill in the empty fields below:

In this situation bidder ........ Wins the auction and pays ....... .

Four bidders A,B,C,D participated in a Vickrey action. The bids were bA=23, bB=15, bC=31, bD=29. Fill in the empty fields below:

In this situation bidder ........ Wins the auction and pays ....... .

Let's denote by QAC, QAVC, QMC the production levels at which AC, AVC, and MC have their minimums. Assuming the typical shape of cost curves, the following relationship takes place:

When the price of variable production factor decreased, a monopolist reacted optimally. Comparing with the starting situation, his:

The principle-agent model represents the problem that is called (select one)

Moral hazard

Prisoner's dilemma

Adverse selection

Free riding

The value of the price elasticity of demand for X equals -3,5. Which of the sentences below are true?

If price of X falls by 1%, the demanded quantity will increase by more than 1%

If price of X falls, the TR will increase

If price of X falls, the TP will increase

The demand is inelastic

None of mentioned

The long-run average cost curve in a firm is decreasing. This means that the firm's production function exhibits:

Increasing returns to scale

Constant returns to scale

Decreasing returns to scale

There's not enough data to say

AVC is increasing:

Returns to scale is increasing

Returns to scale is decreasing

Returns to scale is constant

Lack of informations

What is a price ceiling? (mark one)

The highest price at which it is legal to make transactions in the market

The lowest price at which it is legal to make transactions in the market

The price at which the firm has max profit

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