Suppose an oligopolistic firm raises the price of its output. Demand for the firm’s output will be relatively price ________ if the other dominant firms in the market ________. A) elastic; do not raise price B) unit elastic; do not raise price C) inelastic; also raise price D) cannot be determined ANSWER A
Date: September 10th, 2020
According to one study, the price elasticity of demand for restaurant meals is -2.27. This implies that if restaurants want to increase their total revenues they should: A) increase prices. B) decrease prices. C) leave prices unchanged. D) cannot be determined with the information given. ANSWER B
Date: September 10th, 2020
Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process. Assume also that the marginal product of the 20th unit of capital is 40 units of output, the marginal product of the 100th unit of labor is 10 units of output and the per unit prices […]
Date: September 10th, 2020
Which of the following best describes the basic characteristics of noncooperative oligopoly models? A) Managers make decisions based on the strategy they think their rivals will pursue. B) Managers attempt to deliberately mislead their rivals regarding the strategy they will pursue. C) When making decisions, managers basically ignore the mutual interdependence that exists among rivals. […]
Date: September 10th, 2020
The rate of inflation measures the change in the relative prices of the goods and services produced in the macroeconomy over a specified period of time. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
A labor-intensive method of production is one that: A) requires employees to work harder than they would in other occupations. B) relies exclusively on labor. C) relies on large quantities of labor and smaller quantities of capital equipment. D) combines a small but sophisticated labor force with a large amount of capital. ANSWER C
Date: September 10th, 2020
According to the kinked demand curve model, if an oligopolistic firm lowers its price, it should expect to see its total revenue: A) increase. B) stay the same. C) decrease D) cannot be determined without more information. ANSWER C
Date: September 10th, 2020
A production method that relies on large quantities of machines and equipment and smaller quantities of labor is referred to as a: A) variable-input-intensive method of production. B) labor-intensive method of production. C) technology-intensive method of production D) capital-intensive method of production. ANSWER D
Date: September 10th, 2020
Demand for a good will tend to be more price elastic if it exhibits which of the following characteristics? A) It accounts for a small part of the consumer’s total income. B) The good has many available substitutes. C) It is a non-durable (as opposed to a durable good). D) There is little time for […]
Date: September 10th, 2020
In the case of a short-run production function: A) all of the inputs are variable. B) the amount of labor employed is held constant. C) at least one of the inputs is fixed. D) all of the inputs are fixed. ANSWER C
Date: September 10th, 2020
