The expansion of Social Security in 1956 added _____. a. cash benefits to surviving dependents b. disability insurance to those in the program c. medical benefits to those over 65 d. medical benefits to surviving dependents ANSWER b
Date: September 9th, 2020
What is the relationship between food stamps and cash transfer payments? When, if ever, are they equivalent? When, if ever, might they diverge? What will be an ideal response? ANSWER Food stamps are equivalent to cash transfer payments in situations where recipients would have spent that much on food anyway had they been given […]
Date: September 9th, 2020
For the utility function U = Wa, what values of “a” correspond to being risk averse, risk neutral, and risk loving? What will be an ideal response? ANSWER 0 < a < 1 implies risk averse. a = 1 implies risk neutral. a > 1 implies risk loving.
Date: September 9th, 2020
A perfectly competitive firm has the cost function TC = 1000 + 2Q + 0.1 Q2. What is the lowest price at which this firm can break even? What will be an ideal response? ANSWER MC = 2 + 0.2Q AC = (1000/Q) + 2 + 0.1Q Set MC = AC. for minimum AC, […]
Date: September 9th, 2020
A firm bought a pizza oven for $13,500 and if it shut down now, could sell the oven for $9,500. Which of the following statements is TRUE? A) The relevant cost of the oven when considering shutting down is $13,500. B) The relevant cost of the oven when considering shutting down is $9,500. C) The […]
Date: September 9th, 2020
In two-part pricing with identical consumers, a firm at least A) charges a lump-sum fee equal to the producer surplus. B) sets unit price equal to marginal cost. C) cannot maximize profit compared to single-price monopoly pricing. D) Both A and B. ANSWER B
Date: September 9th, 2020
In a dynamic game, rational players A) will reject outcomes that are not subgame perfect. B) use backward induction to determine best responses. C) have strategies that select a Nash equilibrium in the game as a whole. D) All of the above. ANSWER D
Date: September 9th, 2020
Describe the difference in market structure between monopoly and oligopoly. What will be an ideal response? ANSWER Monopoly has only one producer because the product is unique, or has no close substitutes, or government gives it the exclusive authority to produce and sell that product. Oligopoly has relatively few large firms producing standardized or […]
Date: September 9th, 2020
You pay $15 for an all-you-can-eat buffet. The food isn’t so good, but definitely edible. When you finish eating, what is the marginal value of the last bite of food you consumed? A) zero B) $15 C) positive D) negative ANSWER A
Date: September 9th, 2020
If the present value of all future profit is positive, then A) the firm should remain operating, even if it earns negative profit in the short run. B) the firm should shut down if it is earning a negative profit in the short run. C) the firm should shut down if it cannot cover its […]
Date: September 9th, 2020
