Practice Microeconomics Questions and Answers

• If the cross-price elasticity of demand for tea with respect to coffee is positive, tea and coffee are most appropriately classified as:
• Under second-degree price discrimination, a monopolist primarily uses differences in consumers' willingness to pay by:
• In a Bertrand duopoly with homogeneous products, identical constant marginal costs, and no capacity constraints, the Nash equilibrium price is generally:
• A compensated demand curve holds utility constant. Therefore, a movement along a compensated demand curve isolates the:
• A consumer has U = x^0.4 y^0.6, income 200, px=5 and py=10. The optimal expenditure share on x is:
• If inverse demand is P = 80 - 2Q, marginal revenue is:
• A monopolist faces P = 100 - Q and constant MC = 20. The profit-maximising quantity is:
• If total cost is TC = 100 + 10q + 2q², marginal cost at q=5 is:
• For a CES production function, the elasticity of substitution measures the percentage change in the:
• A Slutsky decomposition separates a price effect into:
• If a good is inferior but not Giffen, a price fall causes the substitution effect to increase quantity demanded while the income effect:
• In a Cournot duopoly with identical firms and inverse demand P = 100 - Q and zero marginal cost, each firm's Nash output is:
• The elasticity of substitution between capital and labour is exactly one for a:
• In long-run perfect competition, entry and exit tend to drive economic profit toward:
• If C = 50 + 0.8(Y-T), I=100, G=150, T=100, equilibrium income is: