ECON 2302 HCCSE Exam 3

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ECON 2302 HCCSE Fall2015, Dr Smith Exam 3

1. Sam’s hamburger shop, represented by Exhibit K-1,
is a monopolistic competitor
a. making a profit of $100
b. producing an economically efficient output level of 50 hamburgers
c. in long-run equilibrium at 50 units of output
d. taking in $400 of revenue.

2. Maxine’s electro-translucent circuit board, a newly patented product, has been making her firm (ECB,
Inc.) a bundle of money since being introduced to the market 6 months ago. Referring to Exhibit K-3,
a. Maxine’s profit is $200
b. profit maximizing output is 100 units
c. Maxine’s profit is $450
d. profit will be driven to zero in the long-run.

ECON 2302 Exam 3

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3. Ralph’s "Roll Free Rolling Pin" factory used to be the only business of its type but now faces many
competitors in its market, each having a similar but differentiated product. Which of the panels in Exhibit
K-4 is the most appropriate representation of Ralph’s long-run situation producing "q" units of output?
a. Panel 1
b. Panel 2
c. Panel 3 (Sample Answer)
d. Panel 4.