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
The unfunded nature of the Social Security system has no effect on investment. a. True b. False ANSWER b
Date: September 9th, 2020
From a management policy perspective, which regression result is the most useful? A) a regression equation that passes the F-test B) a regression equation whose explanatory variables all pass the t-test C) a regression equation that has the highest R2 D) a regression equation that has the least number of dummy variables ANSWER B […]
Date: September 9th, 2020
Show that for a monopolist with a constant marginal cost and facing a linear demand curve, if a specific tax is imposed on the monopolist, the tax burden is shared equally between the monopolist and the consumers. What will be an ideal response? ANSWER A monopolist facing demand p = a – bQ and […]
Date: September 9th, 2020
Which of the following statements about private and social costs associated with a negative externality is TRUE? A) Social costs include externalities. B) Private cost do not include externalities. C) Social costs are never smaller than private costs. D) All of the above. ANSWER D
Date: September 9th, 2020
What is the advantage of the government imposing an ad valorem tax over a specific tax when facing a monopoly? What will be an ideal response? ANSWER When comparing an ad valorem tax to a specific tax which generates the same revenue, the ad valorem tax is less distortionary, resulting in a smaller DWL. […]
Date: September 9th, 2020
Barometric price leadership can occur when oligopolistic firms A) compete on the basis of differentiated products. B) want to avoid price competition and violating antitrust laws. C) try to enforce cartel agreements. D) All of the above ANSWER B
Date: September 9th, 2020
A dummy variable is also called A) an approximate variable. B) a discrete variable. C) a zero-sum variable. D) an improper variable. ANSWER B
Date: September 9th, 2020
