Mutual interdependence among firms is one of the key characteristics of an oligopoly market that distinguishes it from the other three major market structures. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Why are isoquants negatively sloped? A) Along a single isoquant, the firm can substitute the use of one input for another while holding the total level of output constant. B) Due to the effects of diseconomies of scale. C) Because the farther the isoquant is from the origin, the higher the level of output. D) […]
Date: September 10th, 2020
A demand elasticity coefficient is a measure of the sensitivity of quantity demanded to a change in one of the determinants of demand. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
All else constant, as more firms substitute alternative materials, e.g., plastic, for copper, the market price of copper would be expected to: A) increase. B) stay the same. C) decrease. D) cannot be determined with the information given. ANSWER C
Date: September 10th, 2020
Although Coca-Cola and PepsiCo are major players in the soft drink industry, the large number of other competing firms means that the industry is most accurately characterized as monopolistically competitive. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume a consumer is currently purchasing a combination of goods, X and Y, that maximizes her utility given her budget constraint, i.e., MRSX,Y = PX/PY. Now assume that there is a decrease in the price of Y. In this case, to once again maximize her utility, the consumer will want to adjust her purchases of […]
Date: September 10th, 2020
The capacity utilization rate is the ratio of ________ to ________. A) production; capacity B) capacity; production C) capacity; potential GDP D) none of the above ANSWER A
Date: September 10th, 2020
Many analysts have argued that the federal government should stop spending money on programs such as agricultural price supports and should redirect that spending to such things as improvements in the nation’s roads and bridges. Construct an economic argument that supports this proposed change in policy. ANSWER Government spending on agricultural price supports amounts […]
Date: September 10th, 2020
Assume the price of product A increases from $1 to $1.50, while the price of competing product B increases from $1.50 to $2.00. Based on the information, what we can say about the absolute and relative price differences between the two products and the relative attractiveness of the two products to consumers. ANSWER Clearly, […]
Date: September 10th, 2020
Referring to the previous question, as a result of the consumer’s adjustment to the change in the price of Y, assuming Y is a normal good and X and Y are complements, it is reasonable to expect that the amount of Y consumed will ________, and the amount of X consumed will ________: A) increase; […]
Date: September 10th, 2020
