Owners and managers A) must be the same people. B) may be different people with different goals, and in the long run firms that do best are those in which the managers are allowed to pursue their own independent goals. C) may be different people with different goals, but in the long run firms that […]
Date: September 9th, 2020
We manufacturer automobiles given the production function q = 5KL where q is the number of autos assembled per eight-hour shift, K is the number of robots used on the assembly line (capital) and L is the number of workers hired per hour (labor). If we use K=10 robots and L=10 workers in order to […]
Date: September 9th, 2020
The point price elasticity of demand is -1/2. The price of the product increases from $1.00 to $1.10. Given the information in Scenario 4.3, the quantity demanded will decrease by approximately: A) 5 units. B) 5 percent. C) 10 units. D) 10 percent. E) none of the above ANSWER B
Date: September 9th, 2020
What happens to the market outcome if cartel members cheat on the collusive agreement? A) Price declines, but firm-level quantities remain the same because the firms act like price takers B) Price and quantity revert to the single-seller monopoly equilibrium outcome C) Other firms raise prices so that the average market price remains unchanged D) […]
Date: September 9th, 2020
Refer to Scenario 18.1. If the fishermen are given the right to clean water, A) the outcome will be more efficient than if the factory is given the right to use the water as it sees fit. B) the outcome will be less efficient than if the factory is given the right to use the […]
Date: September 9th, 2020
Refer to Table 16.1. Use the following statements to answer this question. I. Mexico has an absolute advantage in the production of tomatoes and beer. II. Mexico has a comparative advantage in the production of tomatoes. A) Both I and II are true. B) I is true, and II is false. C) I is false, […]
Date: September 9th, 2020
What happens to the profit-maximizing cartel price and quantity if the marginal cost of production declines? A) The sellers are no longer price takers, so the change in marginal cost has no impact on the cartel outcome. B) If demand is downward sloping, the optimal cartel price should decline and the market quantity should increase. […]
Date: September 9th, 2020
Given the information in Scenario 4.3, erasers are: A) a normal good. B) an inferior good. C) neither normal nor inferior. D) complements. E) necessities. ANSWER A
Date: September 9th, 2020
Some economists conduct empirical research on the theory of the firm by measuring the degree of technical efficiency achieved by actual firms. What type of research contributions are provided by these studies? A) Normative B) Positive C) Administrative D) Executive ANSWER B
Date: September 9th, 2020
Refer to Table 16.1. Which of the following statements is correct? A) There are potential gains from trade if: (1 ) Mexico specializes in the production of tomatoes, (2 ) Guatemala specializes in the production of beer, and (3 ) Mexico trades tomatoes to Guatemala for beer. B) There are potential gains from trade if: […]
Date: September 9th, 2020
