ECO 365 Final Exam (August 2015) - Assignment.pdf

Pareto externalityPositive externalityNegative externalityNormative externality10). Oligopoly is probably the best market for technological change because:The typical oligopoly has the funds to carry out research and development andbelieve that its competitors are innovating, which motivates it to conduct researchand development.The typical oligopoly lacks the funds to carry out research and development andtherefore will use basic research from universities.Research and development occurs only if government subsidizes such activity,and government tends to subsidize oligopolies.The typical oligopoly keeps price very close to average total cost because it fearsthe entry of new rivals if its profits are excessively high.Complete paper here ECO 365 Week 5 Final Exam11). A perfectly competitive firm facing a price of $50 decides to produce 500widgets. Its marginal cost of producing the last widget is $50. If the firm’s goal isto maximize profit, it should:Produce more widgetsProduce fewer widgetsContinue producing 500 widgetsShut down12). Graphically, a change in price causes:the demand curve to shift.both supply and demand to shift.a movement along a given supply curve, not a shift.the supply curve to shift.Download now ECO 365 Week 2 Knowledge Check