<p>lol…yeah.</p>
<p>and the invisible hand thing is actually the last one…according to the definition found online…</p>
<p>wutever…i only selfstudied economics for less than 15 days…</p>
<p>…hope i can make it.</p>
<p>Does anyone have exact/correct answers for Dina’s test?
<em>official correct answers</em></p>
<p>Where can you get released tests?</p>
<p>First of all Thanks Dina for posting this test. I got some different answers as follows.</p>
<ol>
<li>A (fairly textbook I believe)</li>
<li><p>A monopolistic competitor unlike in perfect competition is able to have some command of the price of its goods –> however in the long run many firms will enter and its share of the market will keep decreasing until –> AR is tangential to AC at its profit maximizing point of Q (MR = MC). Long run –> 0 profits</p></li>
<li><p>D –> when the absolute value of the slope of a demand curve is less than 1 (less than 45 degree angle) we say that it is more elastic for a given price than one that has a slope > 1. Since we have an elastic demand –> consumers react strongly to changes in the price –> producers do not pass on the whole tax to the consumer, instead they eat some of the cost, in fact they eat the greater share of the cost (if demand is perfectly elastic = infinity, a flat line –> producer eats the whole cost –> if demand is perfectly inelastic = 0, a vertical line –> consumer eats the whole tax –> if demand is unit elastic = 1, a 45 degree line –> consumer and producer eat 1/2 tax each)</p></li>
<li><p>Does anyone know why the answer to this is D?</p></li>
<li><p>A –> this is not about MRPL it is about MPL –> Marginal product of Labor is how much output (not revenue) adding an additional worker will produce –> greater productivity greater MPL. I think they tried to trick with the decrease in price bit, to see if you can distinguish between MRPL and MPL.</p></li>
<li><p>A –> You can just take a possible scenario that would result in a shift to the right of the demand curve –> such as fewer substitute goods –> greater demand for your good –> more inelastic –> D2 is less price sensitive –> D1 is more price sensitive</p></li>
<li><p>A –> in the short run the supply of apartments is fixed, since the owners have no real other choice then to rent the building (in the long run they can convert it to something else or destroy the units) –> supply is completely inelastic (vertical line) –> binding rent control –> price ceiling –> have to be below the market equilibrium price </p></li>
<li><p>C –> allocative efficiency = MR = MC (textbook I believe, unless I’m being duped here)</p></li>
</ol>
<p>Folks, please let me know if there is fault with my answers.</p>