PART 6: True or false and multiple-choice questions
Question 16: True or false, firms in situationof monopolistic competition have deadweight losses associated withmonopoly because of barriers to entry.
Question 17: Which of the two demands functionsbelow is most elastic
A) Qa=100-2p
B) Qb=120-p
Question 18: If a buyer values an object for $4and a seller’s cost is $1, which of the statements below isfalse!
- If a transaction takes place, total surplus will beequal to $3
- For the exchange to occur, the price has to be equal to $2.50,no other prices will allow an exchange to occur.
- Whenever an exchange takes place, the allocation isefficient.
- The buyer is ready to pay up to $4 for the object
Question 19: True or false, pricediscrimination is inefficient.
Question 20: Which of these goods’ demand islikely to be most inelastic
- An inhaler for asthmatic people
- A generic soft drink brand
- Cellphones
- Airline tickets
