Final Exam - Suppose the government imposes

 ECO2023 Final Exam 

1. Suppose the government imposes the following production tax on one perfectly competitive firm in an industry: For each unit the firm produces, it must pay $1 to the government. Will consumers in this market end up paying higher prices because of the tax? Why or why not? (3-4 sentences answer; max. 4 points)

2. Is there a deadweight loss if a firm produces the quantity of output at which price equals marginal cost? Explain. (2-3 sentences; max. 2 points)

3. Fast-food stores often charge higher prices for their products in high-crime areas than they charge in low-crime areas. Is this an act of price discrimination? Why or why not? (5-8 sentences; max. 8 points)

4. Will there be profits in the long run in a monopolistically competitive market? Explain your answer. (3-4 sentences; max. 4 points)

5. How are oligopoly and monopolistic competition alike? How are they different? (5-8 sentences; max. 8 points)

6. Compare the U.S. income distribution in 1967 with the income distribution in 2019. Has U.S. income inequality increased or decreased? What percentage of total money income did the top fifth of U.S. households receive in 2019 (5-8 sentences: max. 8 points)

 

Extra Credit

7. The desire for profit can end up pushing countries toward producing goods in which they have a comparative advantage. Do you agree or disagree? Explain your answer. (3-4 sentences; max. 4 points)

 

Do not send this final exam by email. You must upload it before 12:05 pm in Assignments’’ section under D2L.

 

 

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If there is similarity index greater than 20% you will atomically receive “0” points for your exam.