A recipient of a Section 8 rent subsidy can be used to rent any government approved housing project. a. True b. False ANSWER a
Date: September 9th, 2020
The Cournot and Stackelberg models are similar, EXCEPT Cournot ________ and Stackelberg ________. A) sets price; sets output B) sets output; sets price C) is dynamic; is static D) is static; is dynamic ANSWER D
Date: September 9th, 2020
Consider a general Cobb-Douglas production function q = ALaKb where A, a and b are positive constants. Using this production function, derive the short-run cost function for a fixed capital stock, K0, wage rate w, and capital rental rate r. ANSWER The production function is q = ALaKb Rearrange to get La = (q/AKb) […]
Date: September 9th, 2020
When there’s uncertainty as to the length of a game A) cooperation still does not occur, because cooperation unravels at the beginning of the game. B) cooperation can potentially occur if trigger strategies are adopted. C) firms will cooperate because they treat the game as one that is infinitely repeated. D) firms will randomly pick […]
Date: September 9th, 2020
If government imposes a price ceiling on a good that is below the market equilibrium price A) a surplus will develop. B) a shortage will develop. C) producers will reduce their sales price. D) consumers will reduce their demand for the good. ANSWER B
Date: September 9th, 2020
If a government policy change harms a monopolist, the government could A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. C) do nothing, because the change is a Pareto […]
Date: September 9th, 2020
If a competitive firm cannot earn a profit at any level of output during a given short-run period, then which of the following is FALSE? A) It will shut down in the short run and wait until the price increases sufficiently. B) It will exit the industry in the long run. C) It will operate […]
Date: September 9th, 2020
Government expenditures on housing subsidies at all levels total more than $45 billion a year. a. True b. False ANSWER a
Date: September 9th, 2020
Suppose that a perfectly competitive industry is in long-run equilibrium, and demand increases. Explain the short- and long-run effects on the firm and the industry. What will be an ideal response? ANSWER Short run: An increase in demand raises equilibrium price and quantity. Existing firms produce more (because the higher price means that MR=MC […]
Date: September 9th, 2020
Suppose you have $400,000 saved up and purchase a medium-sized house for $200,000. Consider the following 2 scenarios: i. The very next day, the prices of all houses, including the one you have just bought, double. ii. The very next day, the prices of all houses, including the one you bought, fall by half. Show […]
Date: September 9th, 2020
