1. 1 and 3 only

2. 2 And 4 only

3. 1,3 and 4 only

4. 2,4 and 5 only

5. everything except 3

41. The essential feature of all imperfect competition models is that

1. the product is differentiated

2. firms can collude and form a cartel

3. Demand curve is not perfectly elastic

4. marginal revenue exceeds the price it charges

5. more than one answer is correct

42. Which of the following statements is true regarding monopolistic competition?

1. Monopolistic competitors produce differentiated good

2. Monopolistic competitors produce at the socially efficient level of output

3. In the long run the profit of the firm is 0, therefore the government cannot impose additional taxes on the industry

4. Like the perfect competitor, the monopolistic competitor must sell at the prevailing market price

5. More than one answer is true.

43. The diagram above shows the cost and the revenue curves for a monopolistic competitor. Which of the following is correct?

(A) The profit maximizing output is OB.

(B) The graph cannot describe a monopolistic competitor

(C) DWL from monopolistic competition is KMN

(D) The long-run equilibrium price is OT

(E) In the long-run the monopolistic competitor will not operate

44. Which of the following payoff matrices represents the “prisoner’s dilemma” game?

(A) (1;1) (3;2) (B) (1;1) (5;0)

(2;3) (4;4) (0;5) (4;4)

(C) (4;4) (2;3) (D) (2;2) (4;1)

(3;2) (5;5) (1;4) (3;3)

(E) several answers are correct

(F) none of the above

45. Oligopolistic firms are interdependent, because

(A) some of them always form a cartel

(B) the production is homogeneous

(C) government threatens them with antitrust legislation

(D) the concentration in the industry is relatively high

(E) none of the above

46. The kinked demand curve model was developed in order to:

1. Show why it may be optimal to keep nominal prices constant under oligopoly

2. show that the marginal revenue curve is discontinuous.

3. show that there is product differentiation under monopolistic competition

4. show that cartels are unstable.

5. More than one answer is correct

47. A student has just returned from summer vacations, which made him/her lazier than he/she was during the term. What has happened to his/her labour supply curve?

(A) it shifted upwards

(B) it shifted downwards

(C) it shifted to the right

(D) impossible to say

48. A change in which of the following will cause a shift in the demand curve for labor?

(A) supply of labor

(B) prices of substitute factors

(C) supply of capital

(D) changes in preferences over work and lerisure

(E) several answers are correct

49. A backward-bending labor supply curve would mean that

(A) there is no substitution effect

(B) there is no income effect

(C) the substitution effect dominated the income effect

(D) the income effect dominated the substitution effect

(E) it is not possible

50. Minimum wage law can

1. Reduce employment

2. Increase employment

3. Have no impact on employment

1. I and II only

2. I and IIIonly

3. II and III only

4. I only

5. I and II and III