If firms in duopoly collude and operate as a monopoly, the industry produces more output compared to the Nash equilibrium. True or false? Explain.
What will be an ideal response?
Ques. 2Because of a decrease in labor costs, a monopoly finds that its marginal cost and average total cost have decreased. The monopoly ________ its price and ________ its quantity.
A) raises; increases
B) raises; decreases
C) lowers; increases
D) lowers; decreases
Ques. 3In September 2008, Toyota Motor's share of the U.S. auto sales market was 15 percent, Ford's market share was 12.1 percent, GM's was 29.1 percent, Honda's was 10 percent, Nissan's share was 6.2 percent, and Chrysler's market share was 11.1 percent.
What type of market structure would the market for autos represent? A) monopolistic competition
B) monopoly
C) oligopoly
D) markets and competitive environment
Ques. 4Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's economic profit?
A) zero
B) between 0 and 0.50 per hour
C) between 0.51 and 1.00 per hour
D) more than 1.00 per hour
Ques. 5If the marginal social benefit exceeds the marginal social cost of producing the next kilowatt hour of electricity, then it is efficient to produce as many kilowatt hours as possible.
Indicate whether the statement is true or false
Ques. 6Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers.
What will be an ideal response?
Ques. 7If addiction makes cigarettes such a necessity, is it correct to think that cigarettes are perfectly inelastic in both supply and demand.
What will be an ideal response?
Ques. 8Mr. McConaughey has the afternoon, 5 hours, to spend doing whatever he wants. How much time does Mr. McConaughey spend with his friends and family and how much time does he spend breaking a sweat to maximize his total utility?
A) 3 hours with friends and family and 2 hours breaking a sweat
B) 2 hours with friends and family and 3 hours breaking a sweat
C) 0 hours with friends and family and 5 hours breaking a sweat
D) 3 hours with friends and family and 4 hours breaking a sweat
Ques. 9The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of
A) 15 per hour.
B) 12 per hour.
C) 9 per hour.
D) 6 per hour.
Ques. 10The commercial banks in Lendland have
Reserves 400 million
Loans 3,600 million
Deposits 4,000 million
Total assets 4,600 million
The banks hold no excess reserves.
a) Calculate the banks' reserve ratio.
b) An immigrant arrives in Lendland with 5 million, which he deposits in a bank. How much does the immigrant's bank lend initially?
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