The decision by the federal government to prohibit cigarette companies from advertising on television actually caused the companies’ profits to increase, an outcome that is consistent with the prediction of the prisoner’s dilemma game. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of the following is not considered a factor that influences supply? A) Technology. B) Production taxes and subsidies. C) The number of buyers. D) Resource prices. ANSWER C
Date: September 10th, 2020
When demand is unit elastic, an increase in price will cause total revenue to increase, stay the same, or decrease, depending on the corresponding change in quantity demanded. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
If desired spending exceeds output, then firms: A) accumulate their inventories and cut production. B) deplete their inventories and cut production. C) deplete their inventories and increase production. D) accumulate their inventories and increase production. ANSWER C
Date: September 10th, 2020
In the long-run production function, all of the inputs to the production process are allowed to vary. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Referring to the previous question, all else constant, a one unit increase in the price of good Y would cause the quantity demanded of good X to: A) decrease by 2 units. B) increase by 2 units. C) decrease by 1 unit. D) decrease by 5 units. ANSWER A
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 total revenue from the sale of a good or service is calculated by multiplying the price paid by the number of units sold. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
In the market for French wines, an increase in demand is illustrated by: A) a movement up the demand curve. B) a movement down the demand curve. C) a shift of the demand curve to the left. D) a shift of the demand curve to the right. ANSWER D
Date: September 10th, 2020
One of the implications of the kinked demand curve model is that even if a firm’s costs change by a measurable amount, market price is unlikely to change. This helps explain the price rigidity observed in many oligopolistic markets. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
