Utility possibility frontier shows:
a. the possible combinations of utility that an efficient bargain can get the negotiating parties.
b. the exact bargain at which the negotiating parties eventually arrive.
c. the highest utility each negotiating party can individually achieve.
d. the possible combinations that maximize payoffs to the negotiating parties.
QUESTION 2A U-shaped long-run average cost curve indicates that
A) economies of scale follow diseconomies of scale.
B) diseconomies of scale follow economies of scale
C) economies of scale and economies of scope are the same.
D) economies of scale dominate diseconomies of scale over all levels of production.
QUESTION 3Zach and Laura want to buy cars and go to the same dealer. The dealer perceives Zach's price elasticity of demand to be lower than Laura's. Which of the following statements will be true?
a. The dealer will quote the same price to both since individual characteristics do not matter.
b. The dealer will quote a higher price to Laura because of her gender.
c. The dealer will quote a higher price to Zach because his demand is less elastic.
d. The dealer will quote different prices to both according to their bargaining tactics.
QUESTION 4If a firm is experiencing constant returns to scale, then the long-run average cost curve is
A) falling.
B) rising.
C) horizontal.
D) shifting
QUESTION 5A conclusion from the study of automobile markets by Allen Jung of the University of Chicago was that:
a. the more experienced buyers got better deals.
b. dealer characteristics had considerable influence on the prices they offered.
c. variation in the offered price by dealers of cars was uniform.
d. there was little or no difference between the average prices quoted to different types of buyers.
QUESTION 6If a firm is experiencing diseconomies of scale, then the long-run average cost curve is
A) falling.
B) rising.
C) horizontal.
D) shifting.
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