Which of the following is a property of an S-shaped curve that corresponds to the prospect theory value function? A) The curve passes through the reference point at the origin. B) Both sections of the curve are convex to the horizontal, outcome axis. C) The curve is symmetric with respect to gains and losses. D) […]
Date: September 9th, 2020
Suppose that all firms in a constant-cost industry have the following long-run cost curve: c(q) = 4q2 + 100q + 100 The demand in this market is given by QD = 1280 – 2p. Suppose the number of firms in the market is restricted to 80 a. Derive the supply curve with this restriction. Find […]
Date: September 9th, 2020
Sam’s company produces output with labor and capital. At the current quantities of labor and capital, the following information is obtained: the output produced by spending one more dollar on labor exceeds the output produced by spending one more dollar on capital. In the long run, is Sam minimizing costs? If not, explain how capital […]
Date: September 9th, 2020
Like other major government programs, an individual knows his contributions to Social Security from the information on his W-2 form. a. True b. False ANSWER b
Date: September 9th, 2020
If children go to school and become productive members of society A) a negative externality is created by the schools. B) a positive externality is created by the schools. C) no externality is created by the schools. D) an externality is created that may be positive or negative. ANSWER B
Date: September 9th, 2020
Which of the following refers to a relatively high correlation among the independent variables of a regression equation? A) autocorrelation B) the identification problem C) statistically insignificant regression coefficients D) multicollinearity ANSWER D
Date: September 9th, 2020
In a monopolistically competitive market A) firms are price setters. B) barriers to entry are high. C) firms earn positive economic profit in the long run. D) products are undifferentiated. ANSWER A
Date: September 9th, 2020
If children go to school and become productive members of society, A) a negative externality is created by the schools. B) a positive externality is created by the schools. C) no externality is created by the schools. D) an externality is created that may be positive or negative. ANSWER B
Date: September 9th, 2020
Cartel agreements tend to break down A) during economic downturns. B) because of price “chiseling” by one or more members. C) when there is overcapacity in the industry. D) All of the above ANSWER D
Date: September 9th, 2020
A firm currently employs five units of capital. When the firm adds a sixth unit of capital, it is able to reach a lower average cost for a greater quantity of output. What does this tell you about the shape of the long-run average cost curve and are economies of scale occurring? Explain briefly. Does […]
Date: September 9th, 2020
