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
Date: September 9th, 2020
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 […]
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
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 […]
Date: September 9th, 2020
Suppose the inverse supply curve in a market is Q = 6p2. If price decreases from 5 to 4, the change in producer surplus is A) 150. B) -54. C) -6. D) -122. ANSWER D
Date: September 9th, 2020
Sandy’s current consumer surplus for candy is 20. Candy is a normal good for her. When her income increases and the price of candy remains unchanged, her consumer surplus will A) increase. B) decrease. C) remain the same. D) Not enough information. ANSWER A
Date: September 9th, 2020
