In the ________, one firm sets its output first, and then a second firm, after observing the first firm’s output, makes its output decision. A) Cournot model B) model of monopolistic competition C) Bertrand model D) kinked-demand model E) none of the above ANSWER E
Date: September 9th, 2020
Which of the following is unlikely to occur as a result of a price support program? A) A reduction in consumer surplus B) A reduction in producer surplus C) An increase in quantity purchased D) An economic cost to government E) Improved economic efficiency ANSWER B
Date: September 9th, 2020
Classic Programs has purchased distribution rights for two television programs that are ready for syndication. One series, The Detectives, was enormously popular during its prime time run and will command a large rental fee. The second series, Kittie and Alma, was a poor parody of a popular series. Kittie and Alma is not expected to […]
Date: September 9th, 2020
Clarke Mementos manufactures small figurines that they sell to retailers around the country. Clarke sells the figurines for $5.00 each, a price the firm considers given. Clarke’s production function is given by the expression: Q = 60L – 0.5L2, where Q = number of figurines per day, and L = number of skilled workers per […]
Date: September 9th, 2020
Refer to Figure 2.1. At point E, demand is: A) completely inelastic. B) inelastic, but not completely inelastic. C) unit elastic. D) elastic, but not infinitely elastic. E) infinitely elastic. ANSWER A
Date: September 9th, 2020
Which of the following pairs of goods are most likely to have a negative cross-price elasticity of demand? A) Hotdogs and hotdog buns B) Coke and Pepsi C) Rail tickets and plane tickets D) A Luciano Pavarotti compact disc and a Placido Domingo compact disc (Both Pavarotti and Domingo are opera stars.) ANSWER A […]
Date: September 9th, 2020
The substitution effect of a price change for product X is the change in consumption of X associated with a change in A) the price of X, with the level of utility held constant. B) the price of X, with the level of real income not considered. C) the price of X, with the prices […]
Date: September 9th, 2020
Which of the following is true concerning the substitution effect of a decrease in price? A) It will lead to an increase in consumption only for a normal good. B) It always will lead to an increase in consumption. C) It will lead to an increase in consumption only for an inferior good. D) It […]
Date: September 9th, 2020
For a given pair of production outputs, the degree of economies of scope: A) is constant across different output levels. B) only increases as the level of output increases. C) may increase or decrease with output. D) will always tend to zero as output becomes very large. ANSWER C
Date: September 9th, 2020
The indifference curve between expected return and the standard deviation of return for a risk-averse investor A) is downward-sloping. B) is upward-sloping. C) is horizontal. D) is vertical. E) can take any shape. ANSWER B
Date: September 9th, 2020
