What is TRUE about every point along a utilities possibilities frontier? A) Markets are perfectly competitive. B) It is possible to move to from one point on the frontier to another point and make everyone better off. C) All allocations are efficient. D) It includes some unattainable points. ANSWER C
Date: September 9th, 2020
Use the following two statements to answer this question: I. A growing firm’s average cost of production will decline over time if output continually expands and economies of scale are present. II. A firm’s average cost of production can decline over time if learning occurs as cumulative output increases. A) Both I and II are […]
Date: September 9th, 2020
Use the following statements to answer this question. I. To maximize profit, a firm will advertise more when the advertising elasticity is larger. II. To maximize profit, a firm will advertise more when the price elasticity of demand is smaller. A) Both I and II are true. B) I is true, and II is false. […]
Date: September 9th, 2020
Suppose the labor market is perfectly competitive, but the output market is not. When the labor market is in equilibrium, the wage rate will: A) be less than price times the marginal product of labor. B) equal price times the marginal product of labor. C) be greater than price times the marginal product of labor. […]
Date: September 9th, 2020
To enforce the optimum level of emissions, a government could set an emissions fee, which would be A) the dollar value indicated by the intersection of the MSB and MCA curves, and would apply to every unit of pollutants the firm emitted. B) the dollar value indicated by the intersection of the MSB and MCA […]
Date: September 9th, 2020
Suppose the US demand curve for gasoline shifts rightward, and the U.S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent. Which of the following statements is true based on this information? A) The price elasticity of supply for […]
Date: September 9th, 2020
Good A is a Giffen good. If the price of good A were to suddenly double, the income effect would cause the purchases of good A to increase by A) more than double. B) exactly double. C) less than double. D) Any of the above are possible. E) none of the above ANSWER D […]
Date: September 9th, 2020
The risk-return indifference curves for a risk-neutral investor are: A) vertical lines. B) straight lines with slope equal to one. C) horizontal lines. D) upward sloping lines that are bowed downward. ANSWER C
Date: September 9th, 2020
Suppose an investor equally allocates their wealth between a risk-free asset and a risky asset. If the MRS of the current allocation is less than the slope of the budget line, then the investor should: A) shift more of their wealth to the risky asset. B) shift more of their wealth to the risk-free asset. […]
Date: September 9th, 2020
Refer to Figure 9.6. The amount the government pays in the market to implement this policy is A) $20. B) $3000. C) $4000. D) $6000. E) $12,000. ANSWER D
Date: September 9th, 2020
