Louey’s Greasy Spoon restaurant charges $15 for each dinner entree and $5 for each dessert selection, and they offer a dinner special that provide an entree and dessert for $18. If a diner at Louey’s assigns zero value to dessert and $19 to an entree, what is their optimal decision? A) Buy the dinner special […]
Date: September 9th, 2020
In general, does the demand for labor become more or less elastic as we increase the number of other variable inputs used in a production process? A) More elastic B) No change in elasticity C) Less elastic D) We cannot answer this question without more information about the other inputs ANSWER A
Date: September 9th, 2020
Along any downward sloping straight-line demand curve: A) both the price elasticity and slope vary. B) the price elasticity varies, but the slope is constant. C) the slope varies, but the price elasticity is constant. D) both the price elasticity and slope are constant. ANSWER B
Date: September 9th, 2020
Suppose a firm has multiproduct cost function that is additive such that C(q1,q2 ) = C(q1 ) + C(q2 ). What is the degree of economies of scope (SC) for this firm? A) 2 B) 1 C) Zero D) Negative ANSWER C
Date: September 9th, 2020
A Giffen good A) is always the same as an inferior good. B) is the special subset of inferior goods in which the substitution effect dominates the income effect. C) is the special subset of inferior goods in which the income effect dominates the substitution effect. D) must have a downward sloping demand curve. […]
Date: September 9th, 2020
In an Edgeworth box, all points of efficiency occur at the A) intersections of the indifference curves. B) the points of tangency between the sets of indifference curves. C) in the midpoint of the diagram. D) at any point other than the intersections of the indifference curves. ANSWER B
Date: September 9th, 2020
The budget line in portfolio analysis shows that A) the expected return on a portfolio increases as the standard deviation of that return increases. B) the expected return on a portfolio increases as the standard deviation of that return decreases. C) the expected return on a portfolio is constant. D) the standard deviation of a […]
Date: September 9th, 2020
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
