For which of the following variables should a “two tail” t-test be applied? A) PA B) I C) PB D) Should be applied for all. ANSWER B
Date: September 9th, 2020
Explain why the intersection of the best-response functions is the Cournot equilibrium. What will be an ideal response? ANSWER On a best-response function, a firm selects the profit-maximizing level of output given the level of output it believes the other firm will produce. At the intersection of the best-response functions, what one firm believes […]
Date: September 9th, 2020
Which of the following best describes the market reaction if a city restricts the number of firms that are allowed to operate in a market? A) The market supply curve shifts to the left. B) The market demand curve shifts to the left. C) Quantity supplied increases because price increases. D) Price decreases. ANSWER […]
Date: September 9th, 2020
The F-test is used to determine if A) a regression coefficient is significant. B) multicollinearity exists. C) a regression equation significantly accounts for the variation in the value of a dependent variable. D) an identification problem is present. ANSWER C
Date: September 9th, 2020
Until 1950, the Social Security program spent ______ of its assets every year. a. less than 10 percent b. between 10 and 20 percent c. between 20 and 30 percent d. over 30 percent ANSWER a
Date: September 9th, 2020
A firm charging prices below marginal cost is said to be engaged in A) price fixing. B) predatory pricing. C) a cartel. D) irrational behavior. ANSWER B
Date: September 9th, 2020
When one automaker begins offering low cost financing or rebates, others tend to do the same. What two oligopoly models might offer an explanation of this behavior? What will be an ideal response? ANSWER (1 ) Kinked demand curve: the assumption behind the kinked demand curve model is that rivals follow price decreases but […]
Date: September 9th, 2020
The rate of return on bonds is lower than on stocks over time because A) bond holders cannot diversify. B) bonds have a lower standard deviation in returns. C) stocks have less non-diversifiable risks than bonds. D) bonds are subject to more random risks than stocks. ANSWER B
Date: September 9th, 2020
Vertical restraints in a contract A) are generally illegal in the U.S. B) usually benefit the firm that produces the raw inputs to the production process. C) are used in vertical mergers. D) can approximate the outcome of a vertical merger. ANSWER D
Date: September 9th, 2020
How is a monopolistically competitive industry like perfect competition? How is it like monopoly? What will be an ideal response? ANSWER Monopolistic competition is like perfect competition in that there are many firms and no barriers to entry (and thus long-run economic profits will be zero). It is like monopoly in that firms sell […]
Date: September 9th, 2020
