In the dominant firm model, the smaller fringe firms behave like: A) competitive firms. B) Cournot firms. C) Stackelberg firms. D) Bertrand firms. E) monopolists. ANSWER A
Date: September 9th, 2020
If households pay a fixed annual fee for trash disposal, A) households will all tend to produce the same amount of garbage. B) households have no incentive to cut back on the amount of garbage they generate. C) that fee will provide households with an incentive to cut back on the amount of garbage they […]
Date: September 9th, 2020
If households could be charged differently for different types of garbage, A) the total amount of garbage would be reduced. B) recycling would be more difficult. C) costs of collecting garbage could be kept much lower. D) billing for garbage collection would be much easier. E) there would be a change in the types of […]
Date: September 9th, 2020
In the kinked demand curve model, if one firm reduces its price A) other firms will also reduce their price. B) other firms will compete on a non-price basis. C) other firms will raise their price. D) Both A and B are correct. E) Both B and C are correct. ANSWER A
Date: September 9th, 2020
When comparing point A, which lies within a utilities possibilities frontier, with point B, which lies on the same utilities possibilities frontier, A) A is necessarily more efficient than B. B) A is necessarily more equitable than B. C) B is necessarily more efficient than A. D) B is necessarily more equitable than A. […]
Date: September 9th, 2020
Firefighters are highly skilled workers who are typically employed by city governments. If a city reduces the wage rate paid to firefighters to be less than the equilibrium wage rate, what happens to the economic rents earned by the firefighters? A) Increase B) Decrease C) Remain unchanged D) Public employees like firefighters cannot earn economic […]
Date: September 9th, 2020
This year a new oil field with substantial reserves has been discovered. Such discoveries are not made every year. Therefore an increase in the demand for oil will: A) increase the long-run price of oil more than the short-run price of oil. B) increase the long-run price of oil less than the short-run price of […]
Date: September 9th, 2020
Suppose the supply and demand of land for natural gas extraction are imperfectly elastic. Given that coal is a potential substitute for natural gas in energy applications, a change in the price of coal may shift the demand curve for natural gas. What happens to the economic rents assigned to land on which natural gas […]
Date: September 9th, 2020
See Scenario 4.1. Holding Daniel’s income and Pd constant at $240 and $3 respectively, what is Daniel’s demand curve for cake? A) Qc = 240 – Pc B) Qc = 240/Pc C) Qc = 120/Pc D) Qc = 240/(3 + Pc) E) none of the above ANSWER D
Date: September 9th, 2020
Which of the following events will help to burst an asset price bubble? A) Speculative demand for the asset quickly declines. B) Speculative demand for the asset quickly increases. C) New information leads buyers to doubt that prices will continue to increase in the future. D) A and C are correct ANSWER D
Date: September 9th, 2020
