When sellers have more information about products than buyers do, we would expect A) sellers to get higher prices for their goods than they could otherwise. B) buyers to pay lower prices for goods than they would otherwise. C) high-quality goods to drive low-quality goods out of the market. D) low-quality goods to drive high-quality […]
The flawed character cause of poverty refers to individual defects in aspiration or ability. Indicate whether the statement is true or false ANSWER T
Common property resources like fish stocks in open waters tend to be over-utilized because: A) the marginal social cost is less than the private marginal cost. B) the marginal social cost is always equal to the private marginal cost. C) the marginal social cost is greater than the private marginal cost. D) none of the […]
A firm maximizes profit by operating at the level of output where A) average revenue equals average cost. B) average revenue equals average variable cost. C) total costs are minimized. D) marginal revenue equals marginal cost. E) marginal revenue exceeds marginal cost by the greatest amount. ANSWER D
A dominant strategy can best be described as A) a strategy taken by a dominant firm. B) the strategy taken by a firm in order to dominate its rivals. C) a strategy that is optimal for a player no matter what an opponent does. D) a strategy that leaves every player in a game better […]
General Motors estimates that U.S. demand for its newest product will be: Qus = 30,000 – 0.5P. Export demand will be Qex = 25,000 – 0.5P. The total market demand curve for this product will be a A) straight line with a slope of -0.5. B) straight line with a slope of -1.0. C) kinked […]
The law of diminishing returns assumes that A) there is at least one fixed input. B) all inputs are changed by the same percentage. C) additional inputs are added in smaller and smaller increments. D) all inputs are held constant. ANSWER A
Given the information in Figure 14.4, the bilateral monopoly wage rate is: A) W1. B) W2. C) W3. D) W4. E) Any of the above. ANSWER E
Suppose MRS does not equal MRT for all consumers. In this case, the economic outcome is not fully efficient because: A) exchange is inefficient. B) the use of inputs in production is inefficient. C) the mix of outputs in inefficient. D) none of the above ANSWER C
See the information in Scenario 4.4. Suppose P = 10, Pc = 100, Pd = 2, A = 5, and I = 50. What is the cross-price elasticity of Rock and Roll Trivia programs and diskettes? A) -1/90 B) 0 C) 1/90 D) 1 E) none of the above ANSWER A
