Refer to Figure 8.1. At 67 units of output, profit is A) maximized and zero. B) maximized and negative. C) maximized and positive. D) not maximized, and zero. E) not maximized, and negative. ANSWER C
Date: September 9th, 2020
As the manager of a firm you calculate the marginal revenue is $152 and marginal cost is $200. You should A) expand output. B) do nothing without information about your fixed costs. C) reduce output until marginal revenue equals marginal cost. D) expand output until marginal revenue equals zero. E) reduce output beyond the level […]
Date: September 9th, 2020
Use the following statements to answer this question: I. If mixed strategies are allowed, every game has at least one Nash equilibrium. II. The maximin strategy is optimal in the game of “matching pennies.” A) Both I and II are true. B) I is true, and II is false. C) I is false, and II […]
Date: September 9th, 2020
Suppose the major soft drink companies develop vending machines for canned and bottled drinks that can determine your maximum willingness-to-pay for a drink, and the machine charges you that price when you purchase a drink. If this were possible, the consumer surplus in the vended soft drink market would be: A) positive because consumer surplus […]
Date: September 9th, 2020
Explain the nature and consequences of asymmetric information for each of the following cases. What options are available in each instance to reduce the problem? a. medical insurance b. issuance of credit cards c. professional athletes d. market for used appliances ANSWER a. Medical insurance is susceptible to adverse selection, since unhealthy people are […]
Date: September 9th, 2020
A quintile is 20% (one-fifth) of a population group. Indicate whether the statement is true or false ANSWER T
Date: September 9th, 2020
Suppose the market demand curve for cable internet service is completely elastic. At the market equilibrium price under perfect competition, the consumer surplus in this market equals: A) total consumer expenditures. B) total sales revenue. C) zero. D) an amount slightly more than total consumer expenditure. ANSWER C
Date: September 9th, 2020
Refer to Figure 8.1. At the profit-maximizing level of output, ATC is A) $26. B) $30. C) $31. D) $40. E) $44. ANSWER C
Date: September 9th, 2020
Refer to Figure 8.1. The firm earns zero profit at what output? A) 0. B) 34 and 79. C) 54. D) 60. E) 67. ANSWER B
Date: September 9th, 2020
Suppose that a firm can produce its output at either of two plants. If profits are maximized, which of the following statements is true? A) The marginal cost at the first plant must equal marginal revenue. B) The marginal cost at the second plant must equal marginal revenue. C) The marginal cost at the two […]
Date: September 9th, 2020
