In comparing monopolistic competition to perfect competition, one can conclude that the lack of free entry is the key to having the ability to set price. Indicate whether the statement is true or false ANSWER False. Free entry is the key to driving long-run profit to zero. The key to price-setting ability is the […]
Date: September 9th, 2020
The trench warfare case during World War I is an example of a(n) A) tit-for-tat strategy. B) explicit agreement. C) non-cooperative Nash equilibrium. D) None of the above. ANSWER A
Date: September 9th, 2020
The main difference between the price-quantity graph of a perfectly competitive firm and a monopoly is A) that the competitive firm’s demand curve is horizontal, while that of the monopoly is downward sloping. B) that a monopoly always earns an economic profit while a competitive company always earns only normal profit. C) that a monopoly […]
Date: September 9th, 2020
The above figure shows the demand and cost curves facing a monopoly. Maximum profit equals A) $0. B) $100. C) $1,000. D) $2,500. ANSWER D
Date: September 9th, 2020
In a repeated prisoners’ dilemma game A) the players act sequentially. B) the outcomes are the same as in a static prisoners’ dilemma game. C) firms’ choices are not influenced by their opponents’ actions. D) cooperation may result if the game is played indefinitely. ANSWER D
Date: September 9th, 2020
In Table 1, Tony’s income elasticity of demand for pizzas is A) 0. B) less than zero. C) greater than 1.0. D) 1.0. ANSWER C
Date: September 9th, 2020
Monitoring of employees A) is only effective while the employees are working, so that payment may be withheld for shirking. B) can be effective after-the-fact if the shirking behavior can be detected later and the employee punished. C) is only effective after-the-fact when it is possible to fire them for shirking. D) None of the […]
Date: September 9th, 2020
Richard receives government transfer payments and currently consumes five guns and six goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%. The government raises Richard’s transfer payments so he can still afford five guns and six goose livers. Does this constitute a true cost-of-living adjustment? […]
Date: September 9th, 2020
Homelessness is not caused by _____. a. the high cost of housing in cities b. the deinstitutionalization of the mentally ill c. drug abuse d. housing subsidies ANSWER d
Date: September 9th, 2020
When the slope of the total revenue curve is equal to the slope of the total cost curve A) profit is maximized. B) marginal revenue equals marginal cost. C) the marginal cost curve intersects the total average cost curve. D) the total cost curve is at its minimum. E) Both A and B ANSWER […]
Date: September 9th, 2020
