International Economics Olympiad 2024

In the case of a monopolist applying price discrimination, the deadweight loss:

• Can be zero

• Will always be higher than in the case of perfect competition

• Will always be higher than in the case of a monopolist that does not price discriminate

• Is equal to the total consumer surplus in the case of perfect competition

• Cannot be eliminated under any condition

An entrant moves first, and the incumbent observes and decides to allow or prevent entry. Payoffs are: Stay out: entrant = 0, incumbent = 3 Enter & prevented: entrant = −2, incumbent = −1 Enter & allowed: entrant = 3, incumbent = 2 What are the optimal outcomes?

• Entrant receives 0, incumbent receives 3

• Entrant receives −2, incumbent receives −1

• Entrant receives 3, incumbent receives 2

• Entrant receives 0, incumbent receives 2

• Entrant receives 2, incumbent receives 1

Factory A can make 100 red or 200 yellow cars. Factory B: 50 red or 150 yellow cars. Which has a higher opportunity cost of producing one yellow car?

• Both factories have the same opportunity cost

• Factory A

• There is not enough information to answer

• Factory B

• Neither factory

Consumers are willing to pay £40, £35, £25, and £20 for sweaters. Market price = £28. What is the total consumer surplus?

• £19

• £16

• £8

• Cannot be determined

• £12

Supply curve: P = 0.5Q; Demand curve: P = 100 – (1/3)Q If a per-unit tax is imposed, who bears more burden?

• Consumers

• Firms

• Both equally

• Cannot be determined

• Government

Price of apples falls from $2.00 to $1.82; quantity rises from 100kg to 118kg. Calculate elasticity and classify.

• −1.5; elastic

• −0.5; inelastic

• −1.0; unit elastic

• −2.0; elastic

• −0.9; inelastic

Alvin fills tank regardless of price; Simon spends €50 on gas; Theodore only buys if price = €2. What are their price elasticities?

• 0 (Alvin), unit elastic (Simon), perfectly elastic (Theodore)

• 1 (Alvin), 0 (Simon), 2 (Theodore)

• −1 (Alvin), unit elastic (Simon), perfectly elastic (Theodore)

• 1 (Alvin), 0 (Simon), perfectly inelastic (Theodore)

• Undefined for all

Which of the following statements is correct regarding the impact of taxes (deadweight loss) ?

• a tax on gasoline has a greater deadweight loss in the short run

  than in the long run and a tax on alcohol generates a larger

  deadweight loss than a tax on luxury watches

• a tax on gasoline has a greater deadweight loss in the long run

  than in the short run and a tax on alcohol generates a smaller

  deadweight loss than a tax on luxury watches

• a tax on gasoline has a greater deadweight loss in the short run

  than in the long run and a tax on alcohol generates a smaller

  deadweight loss than a tax on luxury watches

• a tax on gasoline has a greater deadweight loss in the long run

  than in the short run and a tax on alcohol generates a larger

  deadweight loss than a tax on luxury watches

For a monopoly, which points are optimal to produce at?

• Points A or B only

• Points A, B, and C

• Point A only

• Points B and C only

• Only point C

What is the correct definition of the output gap?

• Difference between total imports and exports

• Difference between actual output and potential output

• Gap between rich and poor

• Difference between revenue and expenditure

• Difference in capital and labor