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AGEC 217 Exam 1 Review Questions with Solutions
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AGEC 217 Exam 1 Review Questions with Solutions
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AGEC 217 Exam 1 ReviewQuestions with Solutions
The fewer substitutes a good has the more ______ it is - -inelastic
- If a producer of an inelastic good wants to raise revenue, she should ______
price. - -raise/increase
- If a producer of an elastic good wants to raise revenue, she should ______
price. - -lower/decrease
- The OPE of a Giffen Good is - -positive/+/>0
- T/F: The fewer substitutes a good hads, the more elastic it is. - -False
- Marginal cost if the derivative of _______. - -total cost
- Marginal revenue is the derivative of _______. - -total revenue
- T/F: When a firm's marginal revenue equals its marginal cost, you have
found the minimum profit. - -False
- The derivative of marginal revenue for monopolies is always _______. - -
negative/-
- The derivative of marginal revenue for perfectly competitive firms is
always ______. - -zero/0
- T/F: Monopolies are considered price makers, thus they have horizontal
demand curves. - -False
- T/F: Monopolies are considered price makers, thus they have a downward
sloping demand curve. - -True
- For minimization Lagrangian problems, you _______ a constraint to attach
it. - -subtract
- For maximization Lagrangian problems, you attach the constraint by
_______ it. - -adding
- _______ is the method for solving constrained optimization problems. - -
Lagrangian/Lagrangian Multiplier Method
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