Suppose your manufacturing firm is not a price-taking seller (i.e., has some control over your product price) and sells machinery to U.S. (domestic) buyers as well as foreign buyers. The domestic demand for your product is inelastic but the foreign demand is elastic, and the machinery is bulky so that the high transport costs prevent […]
Which of the following is a public good? A) Telephone service B) Broadcast TV C) A daily newspaper D) The Red Cross E) all of the above ANSWER B
The demand curve facing a perfectly competitive firm is A) the same as the market demand curve. B) downward-sloping and less flat than the market demand curve. C) downward-sloping and more flat than the market demand curve. D) perfectly horizontal. E) perfectly vertical. ANSWER D
Augustus bought his BMW convertible as a new car in 1998 and knows that it is in excellent condition. He now wants to sell it and knows that there are many other similar cars on the used car market that are lemons. As a result: A) he should be able to sell my car at […]
The burden of a tax per unit of output will fall heavily on consumers when demand is relatively ________ and supply is relatively ________. A) inelastic; elastic B) inelastic; inelastic C) elastic; elastic D) elastic; inelastic ANSWER A
Which of the following is TRUE for the game in Scenario 13.4? A) NRG’s dominant strategy is to sponsor the marathon. B) NRG’s dominant strategy is to sponsor the TV show. C) Vita’s dominant strategy is to sponsor the marathon. D) Vita’s dominant strategy is to sponsor the TV show. E) Neither company has a […]
Which of the following is NOT a factor that has contributed to declining private-sector differential between union and nonunion wages in the U.S. since 1980? A) Globalization of the production process B) Improved ability of firms to substitute capital for labor in production C) Adoption of two-tiered wage and benefit structures by unionized firms D) […]
The demand curves for gold in New York and Zurich can both be represented by a line with negative slope, -b. When the price is zero the demand for gold is x ounces higher in New York than in Zurich. At the current price of gold the price elasticity of demand for gold in New […]
Many governments around the world attempt to improve the incomes of commodity producers by taking steps to increase the commodity price in the domestic market. Although this may reduce quantity demanded for the product, the action may be effective because: A) commodity supply tends to be inelastic, so quantity does not decline by much. B) […]
At the profit-maximizing level of output, marginal profit A) is also maximized. B) is zero. C) is positive. D) is increasing. E) may be positive, negative or zero. ANSWER B
