According to the kinked demand curve model, regardless of whether a firm increases or decreases price, its total revenues will decrease as a result of the price change. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Assuming the demand curve in question is downward sloping, the calculated price elasticity of demand will always be negative. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
All else constant, all of the following would cause the demand curve for a good to shift except: A) a change in the cost of producing the good. B) a change in the price of a related good. C) a change in consumer’s incomes. D) a change in the number of buyers. ANSWER A
Date: September 10th, 2020
A major weakness of the kinked demand curve model is that it does not explain how the equilibrium price, i.e., the price at the kink in the demand curve, is determined. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The aggregate expenditure in an open economy is defined as: A) E = C + I + G. B) E = C + I + G + X. C) E = C × I × G × X – M. D) E = C + I + G + X – M. ANSWER D
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
A movement down along a given isoquant causes the marginal rate of technical substitution to: A) increase. B) stay the same. C) decrease. D) cannot be determined without additional information. ANSWER C
Date: September 10th, 2020
One of the surprising conclusions of many of the noncooperative models of oligopoly is that firms end up better off with the noncooperative outcome than they would by cooperating with one another. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
In comparing an oligopolistic firm to a perfectly competitive firm it is generally assumed that the price charged by the competitive firm will be higher than the price charged by the oligopolistic firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
