Game theory is distinctive in that its elements are
A) costs, prices, and profits.
B) revenues, elasticity, and profits.
C) rules, strategies, payoffs, and outcomes.
D) patents, copyrights, and barriers to entry.
Ques. 2If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for
A) tea rightward.
B) tea leftward.
C) coffee rightward.
D) coffee leftward.
Ques. 3The magnitude of the slope of the budget line is equal to the ________ or ________ of the good plotted on the ________ in terms of the other good.
A) relative price; marginal cost; y-axis
B) relative price; total cost; y-axis
C) relative price; opportunity cost; x-axis
D) price; opportunity cost; x-axis
Ques. 4If the price elasticity of demand is less than 1, a monopoly's
A) total revenue increases when the firm lowers its price.
B) total revenue decreases when the firm lowers its price.
C) marginal revenue is undefined.
D) marginal revenue is zero.
Ques. 5A perfectly competitive firm's short-run shutdown point is the level of output at which
A) price equals average total cost.
B) price equals average fixed cost.
C) price equals the minimum average variable cost.
D) price is above the minimum average total cost but below the minimum average fixed cost.
Ques. 6Which of the following is NOT a characteristic of the market structure for monopolistic competition?
A) Firms are free to enter and exit.
B) Firms are price takers.
C) Firms compete on product quality, price, and marketing.
D) There are a large number of firms.
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