Exam (elaborations)
ECS2601 ASSIGNMENT 5 S2 2023 solutions
- Course
- Intermediate Microeconomics
- Institution
- University Of South Africa (Unisa)
ECS2601 ASSIGNMENT 5 S2 2023 solutions
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By: zizilejamba • 1 year ago
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10/19/23, 10:23 AM Assessment 5: Attempt reviewNISA 2023 ECS2601-23-S2 Welcome Message Assessment 5
QUIZ
Started on Thursday, 19 October 2023, 9:37 AM
State Finished
Completed on Thursday, 19 October 2023, 10:22 AM
Time taken 44 mins 33 secs
Marks 38.00/40.00
Grade 95.00 out of 100.00
Question 1
Complete
Mark 2.00 out of 2.00
Which is NOT true of state-owned and managed natural
monopolies?
a. Bureaucrats frequently maximise the operating
budgets of their departments rather than function
with a profit-maximisation objective.
b. X-inefficiency is common because the incentives
for profit are missing.
c. The state is better able to price at marginal cost
(MC) because it can use its taxing power to cover
the losses that result from the MC pricing.
d. The wise state government will set price equal to
average total cost (ATC) so that losses will not
have to be borne by the taxpayer.
Question 2
Complete
Mark 2.00 out of 2.00
For every addtional unit sold, the monopolist earns more
revenue.
Select one:
True
False
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=14247695&cmid=622836 1/7
,10/19/23, 10:23 AM Assessment 5: Attempt review
Question 3
Complete
Mark 3.00 out of 3.00
Given the relationship between the demand curve (Demand)
and the marginal revenue (MR) curve of a monopolist in
terms of their steepness (slope), What is the MR curve
function , when the Demand curve function is given by:
P = 100 - 4Q
a. MR = 200 - 8Q
b. MR = 100 - 8Q
c. MR = 50 - 2Q
d. MR = 100 - 2Q
Question 4
Complete
Mark 2.00 out of 2.00
A natural monopoly is typically characterised by …
a. increasing average costs (AC), which makes it hard
for new entrants to enter the industry.
b. highly elastic product demand curves.
c. marginal costs (MC) that are lower than AC for
large quantities of output.
d. low fixed costs (FC) but very high variable costs
(VC).
Question 5
Complete
Mark 2.00 out of 2.00
An increase in marginal cost will always push the price up
and cause the quantity supplied by a monopolist to be less
than the quantity supplied before the increase in marginal
cost.
Select one:
True
False
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=14247695&cmid=622836 2/7
, 10/19/23, 10:23 AM Assessment 5: Attempt review
Question 6
Complete
Mark 3.00 out of 3.00
A firm faces the following average revenue (demand) curve:
P = 120 – 0.02Q
where Q is weekly production and P is price, measured in
cents per unit. The firm’s cost function is given by C = 60Q +
25,000. Assume that the firm maximizes profits.
What is the level of Profit?
a. 25 000 cents per week.
b. 8 750 cents per week.
c. 20 000 cents per week.
d. 377 800 cents per week.
Question 7
Complete
Mark 2.00 out of 2.00
Average revenue per quanity, is also equal to price times
quantity.
Select one:
True
False
Question 8
Complete
Mark 3.00 out of 3.00
A firm faces the following average revenue (demand) curve:
P = 120 – 0.02Q
where Q is weekly production and P is price, measured in
cents per unit. The firm’s cost function is given by C = 60Q +
25,000. Assume that the firm maximizes profits.
If the government decides to levy a unit tax of 14 cents per
unit on this product, what will be the new level of profit?
a. 359 250 cents per week.
b. 6450 cents per week
c. 9800 cents per week.
d. 1450 cents per week.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=14247695&cmid=622836 3/7
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