1. The electricity market.

2. The market for mobile phone operators’ services in Russia.

3. The world market for cell phones.

4. The market for Treasury bonds (in absence of large players).

5. The Moscow Interbank Currency Exchange (MICEX).

The following three questions refer to this graph:

27. At the profit-maximizing level of output, total variable costs of this firm would equal:

1. 10

2. 100

3. 112,5

4. 50

5. 15

28. If this were a non-price-discriminating multi-plant monopoly, the deadweight loss from this market’s monopolization would equal:

1. 5

2. 50

3. 25

4. 75

5. 12,5

29. If this monopoly could perfectly price discriminate, the consumer surplus would equal:

1. 50

2. 100

3. 112,5

4. 225

5. 0

30. Consider a monopolized market in a state of equilibrium (P^m, Q^m). The government introduces a price ceiling P^max, P^max < P^m. As a direct consequence of that…

1. Equilibrium quantity could increase

2. Equilibrium quantity would decrease, but consumer surplus will increase

3. There would be excess supply in this market

4. The quantity sold by the now regulated monopoly will be Pareto-optimal

5. None of the above

31. In a “prisoner’s dilemma” type of game:

1. Each player is individually rational

2. Nash equilibrium is Pareto-optimal

3. Either player has a unilateral incentive to play his dominated strategy, instead of his dominant one

4. If both players play their dominated strategies, their payoffs are higher than in Nash equilibrium

5. A and d are correct

32. The largest amount of output that a firm can produce with a given combination of inputs is determined by the

A.	marginal product of labor
B.	gains from specialization
C.	cost function
D.	production function
E.	input-output function

33. Which of the following is a COMMON feature of perfectly competitive, monopolistically competitive and monopolistic markets?

1. In long run equilibria, for every firm i, P = min(LRAC_i (q_i))

2. Government regulation could bring the equilibrium quantity closer to the socially optimal one

3. In long run equilibria, P = LRAC_i(q_i) for every firm i.

4. If a firm produces positive output q_i, it must be that MR(q_i)  MC(q_i)

5. P > MR

34. Assume that the industry initially consisted of many plants producing a homogeneous good (i.e., was perfectly competitive). A series of mergers and takeovers have led to a change in its market structure. Social welfare would suffer the least, if that new market structure were:

1. A monopolistic competition

2. A non-price-discriminating monopoly

3. An oligopoly (assuming there are no price wars)

4. A perfectly discriminating monopoly

5. A natural monopoly

35. The following graph illustrates the position of a typical firm in a perfectly competitive industry, which is now in a state of short-run equilibrium. According to the graph, what should this firm do?

1. continue selling its output at p* no matter what: the industry is actually in LR equilibrium.

2. immediately decrease the price it charges: this may draw off potential competition

3. temporarily increase the price it charges: this way it will at least get some profit before new competitors come

4. try to reach a collusion with other firms in this industry – together they may be able to retain their current profits and bar entry for new firms

5. in the short run– nothing.

36. The long-run supply curve of a perfectly competitive industry:

1. Is obtained as a horizontal sum of all short-run supply curves

2. Is relatively steeper than the short-run supply curve

3. Is typically horizontal – but can also be U-shaped

4. Must be upward-sloping

5. No right answer

37. Which of the following is an example of an externality-producing activity?

    1. A chemical plant cleans a local river from pollution by extracting some of the poisonous substances for its production

    2. A group of students bypasses the queue in the canteen joining their friends

    3. A student snores loudly during a Microeconomics seminar

    4. All of the above

    5. None of the above

38. A competitive equilibrium is Pareto efficient unless

1. average cost curves are downward sloping for all firms in one unregulated industry

2. income distribution is not equitable

3. the government imposes per unit taxes

4. the government imposes per unit subsidies

5. more than one answer is correct.

39. Consider a competitive industry creating a negative externality in production that increases nonlinearly with the output produced. In this case:

    1. A per-unit tax can restore efficiency

    2. Direct bargaining can restore efficiency

    3. A quota can restore efficiency

1. I

2. II

3. III

4. II and III

5. I, II and III

40. Which of the following is not a factor of production?

1. land

2. labor

3. capital

4. money

5. All of the above

41. Demand for capital is downward sloping because