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
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
The dominant strategy for each of the players in the prisoner’s dilemma game does not yield the optimal outcome for each player because: A) each player is misinformed about the decision that has been made by the other player. B) the players do not understand the consequences of each of the choices they can make. […]
Date: September 10th, 2020
In the long run, the price elasticity of demand is ________ than in the short run because ________. A) less; consumers have more time in which to make adjustments to price changes B) less; the percentage change is measured over a larger amount of time C) greater; consumers have more time in which to make […]
Date: September 10th, 2020
