Assume the players in a game have reached a Nash equilibrium. It is then reasonable to assume that each player has chosen its dominant strategy. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
As the amount of time a consumer has to adjust to a change in price increases, so does the price elasticity of demand for a good. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Assume that when the price of good X is $12, quantity demanded is 32. When price is decreased to $9, quantity demanded increases to 45. Based on this information, over the range in question demand is elastic. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Personal income taxes are reduced as part of an expansionary fiscal policy. What is the impact on aggregate expenditures and income? A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases. ANSWER A
Date: September 10th, 2020
All else constant, a decrease in the per unit price of labor would create an incentive for a firm manager to substitute labor for capital in the firm’s production process. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Studies and experience suggest that labor and capital are highly complementary inputs to the production of pipe organs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Business taxes increase. What is the impact on aggregate expenditures and income? A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases. ANSWER B
Date: September 10th, 2020
Predatory pricing will be most effective when the costs structures of the firms in an industry, including potential entrants into the market, are identical or at least very similar. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
When the percentage change in price is greater than the corresponding change in quantity demanded, demand is inelastic. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The fact that a firm is using a capital-intensive method of production means that input substitution is not possible. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
