Given the information in Scenario 4.3, it would be correct to say that demand is: A) infinitely elastic. B) elastic, but not infinitely elastic. C) unit elastic (Ep = -1). D) inelastic, but not completely inelastic. E) completely inelastic. ANSWER D
Date: September 9th, 2020
Under Scenario 18.1, suppose the body of water lies on an international boundary, and the fishermen speak a different language than the factory managers. The efficient outcome cannot be achieved if the cost of hiring translators for both parties: A) is less than $4,000. B) equals $5,000. C) is greater than $6,000. D) none of […]
Date: September 9th, 2020
Suppose the supply of non-OPEC oil increases due to new petroleum discoveries in other countries. What happens OPEC’s share of the world oil market? A) Increases B) Decreases C) Remains the same D) We do not have enough information to answer this question. ANSWER B
Date: September 9th, 2020
For many firms, capital is the production input that is typically fixed in the short run. Which of the following firms would face the longest time required to adjust its capital inputs? A) Firm that makes DVD players. B) Computer chip fabricator C) Flat-screen TV manufacturer D) Nuclear power plant ANSWER D
Date: September 9th, 2020
Which of the following costs may provide barriers to entry in a market? A) High research and development expenditures B) License fees C) Sunk costs associated with specialized facilities D) all of the above ANSWER D
Date: September 9th, 2020
A bilateral monopoly is characterized by a market with a single buyer and a single seller. Which factor is most likely to determine the market outcome in this situation? A) Share of total costs that are fixed B) Degree of demand elasticity C) Degree of supply elasticity D) Bargaining power of the firms ANSWER […]
Date: September 9th, 2020
Given the information in Scenario 4.3, suppose that the price of erasers increases slightly from $10. How will this affect the total revenue collected by the firm? A) Total revenue will increase. B) Total revenue will not change. C) Total revenue will decrease. D) There will be an indeterminate change in total revenue. ANSWER […]
Date: September 9th, 2020
Refer to Scenario 18.1. It would be acceptable to both parties to have the fishermen pay the factory A) $0 to install a filter. B) $500 to install a filter. C) $4,000 to install a filter. D) $6,000 to install a filter. E) any amount greater than $4,000 and less than $6,000 to install the […]
Date: September 9th, 2020
Firms often use patent rights as a: A) barrier to exit. B) barrier to entry. C) way to achieve perfect competition. D) none of the above ANSWER B
Date: September 9th, 2020
Refer to Scenario 18.1. Which of the following is TRUE? A) The factory will never agree to B, because that would leave them with much less profit than the fishermen. B) C will never occur because that would leave the fishermen with much less profit than the factory. C) If the factory refused to install […]
Date: September 9th, 2020
