The term “relative price” is used to refer to how the current price of a good or service compares to the price of the same item in the previous time period. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
A car dealer wants to get rid of the stock of last year’s model. Assume that the dealer knows from past experience that the price elasticity of demand for cars is unitary (= 1). If the price of the cars is currently $20,000 and the dealer wants to increase the quantity demanded from 30 units […]
Date: September 10th, 2020
In which of the following market structures would X-inefficiency be most likely to exist? A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. ANSWER D
Date: September 10th, 2020
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
