The oligopoly model that predicts that oligopoly prices will tend to be very rigid is the ________ model. A) Cournot B) Stackelberg C) dominant firm D) kinked demand ANSWER D
Date: September 9th, 2020
Why are many oligopolistic market outcomes conveniently described by a Prisoners’ Dilemma? A) The firms can always achieve the outcome that maximizes joint outcomes. B) The firms could do better than the Nash equilibrium if they collude. C) The outcome of a Prisoners’ Dilemma is always efficient. D) The outcome of a Prisoners’ Dilemma is […]
Date: September 9th, 2020
Suppose the supply of land is infinitely inelastic and the demand for land is downward sloping but inelastic at the current equilibrium. If the supply curve shifts rightward (e.g. , previously unusable land is cleared for production), what happens to the aggregate economic rents in this market? A) Decrease B) Increase C) Remain the same […]
Date: September 9th, 2020
Under an infinitely inelastic supply of land, the economic rents to land ________ if the price of land doubles. A) increase by less than 100% B) double C) increase by more than 100% D) none of the above ANSWER B
Date: September 9th, 2020
A variable cost function of the form: VC = 23 + Q + 7Q2 implies a marginal cost curve that is A) linear. B) downward sloping. C) U-shaped. D) quadratic. ANSWER A
Date: September 9th, 2020
Refer to Figure 4.2. The income effect on the quantity of clothing purchased is: A) the change from C1 to C3. B) the change from C1 to C2. C) the change from C2 to C3. D) the change from C3 to C2. E) none of the above ANSWER C
Date: September 9th, 2020
When did housing prices start to fall during the most recent housing boom? A) 2005 B) 2006 C) 2007 D) 2008 ANSWER B
Date: September 9th, 2020
In equilibrium, the price of a transferable emissions permit A) is constrained to the amount the government first charged for it. B) equals the marginal cost of abatement for all firms. C) equals the marginal cost of abatement for the firm with the highest cost, and exceeds the marginal cost of abatement of other firms. […]
Date: September 9th, 2020
Refer to Figure 9.7. Before the policy was implemented, consumer surplus was A) $30. B) $60. C) $45,000. D) $90,000. E) $180,000. ANSWER C
Date: September 9th, 2020
We may be tempted to determine the optimal level of advertising expenditures at the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one). In general, this rule will not allow the firm to maximize profits because it ignores the: A) price […]
Date: September 9th, 2020
