What form of irrational behavior can cause asset price bubbles? A) People do not based their investment decision on the fundamental value of the asset but only on the belief that the asset price will continue to increase. B) People accidentally buy assets that they did not want, and this drives up the asset price. […]
Date: September 9th, 2020
All points within the utilities possibilities frontier are A) unattainable. B) efficient. C) inefficient. D) profitable. ANSWER C
Date: September 9th, 2020
Refer to Figure 9.6. Including the consumers’ expected tax burden, the total change in welfare from this policy is A) -$6000. B) -$5250. C) -$4500. D) $4500. E) $5250. ANSWER B
Date: September 9th, 2020
A group of friends recently started manufacturing specialty T-shirts. The business has grown rapidly, with monthly production up from 50 to 250 in the first 6 months. During this same period, average production cost has been cut in half. The firm’s long-run average cost curve over this range of output A) is downward sloping. B) […]
Date: September 9th, 2020
Refer to Figure 9.6. As a result of this policy, consumer surplus will A) fall to $15. B) fall to $2250. C) rise to $2500. D) fall to $5000. E) rise to $5000. ANSWER B
Date: September 9th, 2020
Use the following statements to answer this question. I. To maximize profit, a firm will increase its advertising expenditures until the last dollar of advertising generates an additional dollar of revenue. II. The full marginal cost of advertising is the sum of the dollar spent directly on advertising and the marginal production cost that results […]
Date: September 9th, 2020
The slope of the utility possibilities frontier is A) positive. B) negative. C) zero. D) undefined. ANSWER B
Date: September 9th, 2020
Refer to Figure 9.6. As a result of this policy, producer surplus will be A) $2000. B) $3375. C) $4500. D) $6000. E) $12,000. ANSWER C
Date: September 9th, 2020
If the MSB/MCA graph indicates that an emissions fee of $10 per unit would lead to the optimum level of emissions, but the government set a fee of $5 per unit, emissions would A) not be reduced at all. B) not occur at all. C) be above the optimum level, but curtailed somewhat from what […]
Date: September 9th, 2020
Suppose the market demand curve for a Bertrand duopoly is downward sloping. What happens to the Nash equilibrium price and market quantity if the constant marginal cost declines? A) Price and quantity decline B) Price increases and quantity declines C) Price decreases and quantity increases D) Price and quantity increase ANSWER C
Date: September 9th, 2020
