In deciding which model of a car to buy, microeconomic theory maintains that consumers are concerned about the absolute price of a particular car, rather than its relative price. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
In order for the first player to move in a sequential game to be able to gain an advantage from making the first move, the player must: A) possess a dominant strategy that is better than the other player’s dominant strategy. B) be able to achieve a higher maximum payoff than the other player. C) […]
Date: September 10th, 2020
An increase in the amount of competition with other firms that employ “best practices” would be likely to cause a particular firm’s labor productivity to: A) increase B) stay the same. C) decrease. D) cannot be determined without additional information. ANSWER A
Date: September 10th, 2020
Which of the following is an example of strategic entry deterrence? A) Marginal cost pricing. B) Limit pricing. C) Price leadership. D) Mark-up pricing. ANSWER B
Date: September 10th, 2020
If we ranked the four market structures on the basis of degree of competition, perfect competition and monopolistic competition would be at opposite ends of the spectrum. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The fact that supermarkets, a land-intensive form of organization, have become the dominant form of grocery store in the United States suggests that: A) there is little or no potential for input substitution in the grocery store business. B) transportation costs are insignificant in the grocery store business. C) land is a relatively inexpensive input […]
Date: September 10th, 2020
Which of the following is least likely to limit the ability of a firm to minimize production costs? A) Resistance by labor. B) The fact that the firm is a nonprofit organization. C) An increase in the amount of competition faced by the firm. D) Legislated input combinations for firms in particular industries, e.g, health […]
Date: September 10th, 2020
Which of the following statements is correct? A) Arc elasticity of demand is the same as the slope of the demand curve. B) Arc elasticity of demand only applies to a nonlinear demand curve. C) Point elasticity of demand is measured at each point along a demand curve. D) Point elasticity of demand is measured […]
Date: September 10th, 2020
In order for “limit pricing” to be effective, the firm practicing such a strategy must be able to charge a price that is: A) lower than the potential entrant’s ATC but greater than the firm’s own ATC. B) greater than the potential entrant’s ATC but lower than the firm’s own ATC. C) lower than the […]
Date: September 10th, 2020
Assume a bottled water company is trying to decide on a new pricing strategy. Sound decision making would require the firm’s managers to consider not only how consumers will respond to the product’s own price, but how they will react to the price for the firm’s product relative to the prices of similar products offered […]
Date: September 10th, 2020
