The key determinant of whether Social Security will be a good investment is _____. a. the number of hours worked by future employees b. internal migration c. real income growth in the United States d. the solvency of the system today ANSWER c
Date: September 9th, 2020
When using regression analysis for forecasting, the confidence interval indicates A) the degree of confidence that one has in the equation’s R2. B) the range in which the value of the dependent variable is expected to lie with a given degree of probability. C) the degree of confidence that one has in the regression coefficients. […]
Date: September 9th, 2020
Restaurants cluster together. That is, on one corner, there may be four similar fast-food restaurants. How can this be explained using a location game theory model? What will be an ideal response? ANSWER Similar to the beach kiosk model, restaurants cluster because they attract the most customers that way. One explanation might be: assume […]
Date: September 9th, 2020
Suppose you work for a government agency that is considering removing certain agricultural subsidies. The removal of these subsidies will increase the price, thus lowering consumers’ welfare. Because only aggregate market data is available, you are unable to measure the exact values for the compensated and equivalent variation by consumer. However, you are able to […]
Date: September 9th, 2020
Which of the following is a way to deter entry? A) increase costs through legislation that affects only new entrants B) raise switching costs for customers that use your products C) obtain a patent so that others must license your invention D) All of the above. ANSWER D
Date: September 9th, 2020
Concerning an investment project, which of the following is TRUE? A) A risk-neutral individual is more likely to invest than a risk-averse individual. B) A risk-neutral individual is more likely to invest than a risk-loving individual. C) A risk-neutral individual is more less likely to invest than a risk-averse individual. D) Not enough information. […]
Date: September 9th, 2020
For the regression equation Q = 100 – 10X + 0.25X2, which of the following statements is true? A) X2 is the more important variable because it is positive. B) When X decreases by one unit, Q decreases by 10 units. C) When X increases by 10 units, Q decreases by 1 unit. D) The […]
Date: September 9th, 2020
A quota will reduce consumer welfare when A) the quota is less than the amount purchased without the quota. B) the quota is greater than the amount purchased without the quota. C) the quota is on a good with high income elasticity. D) Quotas always reduce consumer welfare. ANSWER A
Date: September 9th, 2020
Assume a firm is a monopoly and enjoys $10 million in profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years. If there is no discount rate, how much would the firm be willing to pay to deter entry? A) $250 […]
Date: September 9th, 2020
Consider a market with just one firm. The demand in the market is p = 18 Q and the firm has a linear cost function C(Q) = 2Q. a. How much output will this firm produce. What will be the profit and consumers surplus? b. Suppose a second firm with the same cost function […]
Date: September 9th, 2020
