A “sequential game” is A) another term for a repeated game. B) another term for a cooperative game. C) the term for a game in which individuals receive their payoffs at different times. D) the term for a game in which individuals do not commit to strategy choices at the same time. E) the term […]
Date: September 9th, 2020
Refer to Scenario 17.4. Moral hazard would be eliminated in this situation if A) the insurer would always charge $5000. B) the insurer would always charge $10,000. C) the insurer could costlessly monitor whether a flood control system is in place, and adjust the premium upward if it is not. D) the insurer could costlessly […]
Date: September 9th, 2020
The situation pictured in Figure 6.2 A) is one of increasing marginal returns to labor. B) is one of increasing marginal returns to capital. C) is consistent with diminishing marginal product. D) contradicts the law of diminishing marginal product. E) shows decreasing returns to scale. ANSWER C
Date: September 9th, 2020
Three hundred firms supply the market for paint. For fifty of the firms, their short-run average variable costs are minimized at $10 and short-run total costs are minimized at $15. For the remaining firms, the short-run average variable costs and short-run average total costs are minimized at $20 and $25, respectively. If each firm has […]
Date: September 9th, 2020
The Gini coefficients for land ownership inequality are often substantially higher than the Ginis for household incomes in low income countries. Indicate whether the statement is true or false ANSWER T
Date: September 9th, 2020
College graduates will earn over $1,000,000 more on average than high school dropouts before retiring. Indicate whether the statement is true or false ANSWER T
Date: September 9th, 2020
You manage a new product development team for an electronics manufacturer, and your firm’s policy is that all new projects must pay for themselves in the first five years. Your team has projected that the first year of the project requires an initial investment of $2 million with no revenue, the second year loss is […]
Date: September 9th, 2020
Your firm is evaluating a potential investment in new machinery, but the manager in charge of the project uses an opportunity cost of capital that is too large. How does this error affect the projected net present value of the firm’s investment? A) NPV is overstated B) NPV is understated C) NPV is unaffected D) […]
Date: September 9th, 2020
The shutdown decision can be restated in terms of producer surplus by saying that a firm should produce in the short run as long as A) revenue exceeds producer surplus. B) producer surplus is positive. C) producer surplus exceeds fixed cost. D) producer surplus exceeds variable cost. E) profit and producer surplus are equal. […]
Date: September 9th, 2020
Labor force participation is similar for males ages 25-64 with different levels of education completed. Indicate whether the statement is true or false ANSWER F
Date: September 9th, 2020
