Regression analysis can best be described as A) a statistical technique for estimating the best relationship between one variable and a set of other selected variables. B) a statistical technique for determining the true values of variables. C) a statistical technique for creating functional relationships among variables. D) None of the above ANSWER A […]
In a Stackelberg game, a monopolist could deter entry from a potential rival by A) telling the potential rival not to enter. B) strategically moving first. C) moving to a Bertrand model. D) None of the above. ANSWER B
A conflict between an owner and a manager may occur when A) the manager earns more when the firm has higher profits. B) the manager is seeking to maximize leisure time. C) the owner can easily observe the manager slacking off and punish him accordingly. D) the firm is very small and the manager must […]
The main difference between perfect competition and monopolistic competition is A) the number of sellers in the market. B) the ease of exit from the market. C) the difference in the firm’s profits in the long run. D) the degree of product differentiation. ANSWER D
Social Security is financed through _____. a. an earmarked payroll tax b. an earmarked consumption tax c. an earmarked income tax d. general taxation ANSWER a
In order to regulate a monopoly’s price the government A) needs to hire former executives from the monopoly. B) should rely on industry experts for information. C) needs accurate information on the monopoly’s demand and cost curves. D) needs to know the monopoly’s supply curve. ANSWER C
A common incentive owners offer managers is A) the year-end bonus. B) stock options. C) profit sharing. D) All of the above. ANSWER D
Which of the following is an example of bundling? A) a pair of pants B) a pizza and beer lunch combo C) a bicycle D) All of the above. ANSWER D
If a price of corn is $3.00 a bushel, 5,000 bushels would be demanded. If the price rises to $4.00 a bushel, 4,000 bushels would be demanded. a. What is the (arc) price elasticity of demand? b. Based on this answer, if the price of corn rose to $5.00 a bushel, what would be the […]
If firms are earning economic profit in a monopolistically competitive market, which of the following is most likely to happen in the long run? A) Some firms will leave the market. B) Firms will join together to keep others from entering. C) New firms will enter the market, thereby eliminating the economic profit. D) Firms […]
