In the Baumol model, a change in fixed costs will A) increase total quantity sold. B) have no effect on total quantity sold. C) decrease total quantity sold. D) have an effect on total quantity sold. ANSWER D
Date: September 9th, 2020
The fact that a person with a forceful and persuasive personality but not necessarily the greatest amount of knowledge and judgment can exercise a disproportionate amount of influence is a major drawback of A) the Delphi method of forecasting. B) the market research method. C) opinion polling. D) the jury of executive opinion approach. […]
Date: September 9th, 2020
In general, an externality is created when A) people are affected (other than by price) by a transaction which they were not part of. B) firms produce a product of low quality and consumers don’t like it. C) firms have to pay for pollution the environment. D) the government subsidizes education. ANSWER A
Date: September 9th, 2020
During the 1980s, assets in the Social Security system fell so low they covered less than two months o f benefit payments. a. True b. False ANSWER a
Date: September 9th, 2020
Dominant price leadership exists when A) one firm drives the others out of the market. B) the dominant firm decides how much each of its competitors can sell. C) the dominant firm establishes the price at the quantity where its MR = MC, and permits all other firms to sell all they want to sell […]
Date: September 9th, 2020
A monopolist faces the inverse demand for its output: p = 30 Q The monopolist also has a constant marginal and average cost of $4/unit. The government is seeking ways to collect tax revenue from the monopolist and faces two proposals: i. Impose a specific tax of t on the monopolist. ii. Impose an […]
Date: September 9th, 2020
A manager will have the least confidence in an explanatory variable that A) does not pass the F-test. B) is expressed as a dummy variable. C) does not pass the t-test. D) constitutes only a small part of R2. ANSWER C
Date: September 9th, 2020
In the beauty contest where players predict the outcome of players choosing a number between 0 and 100 A) the Nash equilibrium is 0. B) your prediction should be based on what you think the winning number will be. C) the Nash equilibrium is 33. D) there is no Nash equilibrium because people are not […]
Date: September 9th, 2020
In the ultimatum game, one reason players don’t choose the rational offer is A) that there are too many possible outcomes to reasonably consider. B) they are worse off by taking the offer. C) they prefer to sacrifice to punish “unfair” behavior. D) that it is not a Nash equilibrium. ANSWER C
Date: September 9th, 2020
Determine the output expansion path (equation) for a Cobb-Douglas production function f(L,K) = 10LaK1-a. How does the shape of the output expansion path change as “a” changes? What will be an ideal response? ANSWER Using the MRTS = w/r: aK/(1 – a)L = w/r K/L = (1 – a)w/ar As “a” increases, the output […]
Date: September 9th, 2020
