The derived demand curve for a good component will be more inelastic A) the larger is the fraction of total cost going to this component. B) the more inelastic is the demand curve for the final good. C) the more elastic are the supply curves of cooperating factors. D) the less essential is the component […]
Date: September 9th, 2020
A problem with the TANF program’s predecessor AFDC was that it was strictly means-tested. a. True b. False ANSWER a
Date: September 9th, 2020
The Arrow-Pratt measure of risk aversion is A) negative if a person is risk averse. B) greater than one if a person is risk averse. C) negative if a person is risk loving. D) None of the above. ANSWER C
Date: September 9th, 2020
With two-part pricing, a firm A) charges a lump-sum fee that gives the consumer the right to buy a good or service. B) must have market power. C) must be able to prevent resale. D) All of the above. ANSWER D
Date: September 9th, 2020
What does it mean to say that a perfectly competitive firm is a price taker? Can’t a firm set any price it chooses? What will be an ideal response? ANSWER A firm can set any price it chooses, but in a perfectly competitive industry, it will do no good to choose anything but the […]
Date: September 9th, 2020
If a monopoly wants to maximize its profit, it should produce in the range where A) its average costs are declining. B) its demand curve is elastic. C) its marginal costs are declining. D) its marginal costs are less than its average costs. ANSWER B
Date: September 9th, 2020
Long-run economic rent or profit do not exist for fixed factors like land because A) bidding drives up the price of the factor until no economic rent exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits. ANSWER A
Date: September 9th, 2020
The predecessor of TANF was Aid to Families with Dependent Children. a. True b. False ANSWER a
Date: September 9th, 2020
A Californian student consumes Internet services (I) and books (B). Her preferences are represented by a Cobb-Douglas utility function of the type: U(I,B) = I.5B.5. Initially Y = 100, PI = PB = 1. Lately, however, because of the electricity shortage, the price of the Internet services has increased to 2. The government has decided […]
Date: September 9th, 2020
After employing her last laborer, Rachel notices that her Average Product has decreased. True or False: Her marginal cost is greater than her average variable cost. Indicate whether the statement is true or false ANSWER True . The decrease in average product indicates an increase in average variable cost. The average variable cost rises […]
Date: September 9th, 2020
