In game theory, a Nash equilibrium is defined as: A) the dominant strategy of each player. B) a set of strategies for which all players are choosing their best strategy, given the actions of the other players. C) the set of strategies that result in the maximum payoff to each player. D) the set of […]
Date: September 10th, 2020
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
With respect to prices, at the macroeconomic level attention is focused on relative prices, while at the microeconomic level attention is focused on absolute prices. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Why is the prisoner’s dilemma game useful in studying oligopoly behavior? A) Because oligopolies make out like bandits. B) To illustrate the problems encountered when making decisions under uncertainty. C) To show that oligopolies behave as monopolists in the long run and earn positive economic profits. D) To illustrate how barriers to entry lead to […]
Date: September 10th, 2020
All else constant, as the price of petroleum increases relative to the prices of other inputs to the production process, in their effort to minimize their total costs of production, we can expect to see firms employ: A) less of each of the inputs of production. B) more petroleum and less of the other inputs […]
Date: September 10th, 2020
Assume a firm uses two inputs, capital and labor. All else constant, an increase in the price of labor would create an incentive for the firm to: A) substitute labor for capital in its production function. B) substitute capital for labor in its production function. C) hire more capital and labor. D) hire less capital […]
Date: September 10th, 2020
Managerial economics refers to the application of microeconomics to business decision making. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Macroeconomics is concerned with the behavior of all of the firms in a particular industry, while microeconomics focuses on a single firm in the same industry. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Many unions attempt to raise the hourly wages received by their members by restricting the supply of workers firms can hire from. Assuming the demand for workers who belong to these unions is inelastic, this would cause: A) wages of individual union members to decrease and the total (combined) income of union members to increase. […]
Date: September 10th, 2020
Suppose an oligopoly consists of two firms. Firm A lowers price and Firm B responds by lowering its price by the same amount. If average costs and industry output remain the same, which of the following will occur? A) The profits of the two firms will increase. B) The profits of the two firms will […]
Date: September 10th, 2020
