The kinked demand curve: (Multiple Choice)

The kinked demand curve:
 a. applies when competitors match price decreases but not price increases.
  b. could apply to market demand in any market structure.
  c. applies when competitors match price increases but not price decreases.
  d. applies to the price leadership model.
  e. applies when competitors act independently.

QUESTION 2

Marginal product measures the change in:
 a. total cost brought about by changing production by one unit.
  b. product price brought about by changing production by one unit.
  c. a firm's revenue brought about by changing production by one unit.
  d. the firm's output brought about by employing one additional unit of input.
  e. the firm's profit brought about by employing one more input.

QUESTION 3

Which of these is a lagging economic indicator?
 a. The unemployment rate
 b. Personal income
 c. Industrial production
 d. Total employment
 e. Fluctuations in stock prices

QUESTION 4

The conclusion arrived at from a kinked-demand oligopoly model is that:
 a. oligopoly firms cannot maximize their profits.
  b. oligopoly firms should keep prices at their current level.
  c. all oligopoly firms should raise prices.
  d. all oligopoly firms should lower prices.
  e. oligopoly market structure will lead to lower prices than more competitive industries.

QUESTION 5

Suppose when a car wash has 2 washing stations and 5 workers and is able to wash 100 cars per day. When it adds a third station, but no more workers, it is able to wash 150 cars per day. The marginal product of the third washing station is:
 a. 100 cars per day.
  b. 150 cars per day.
  c. 5 cars per day.
  d. 50 cars per day.

QUESTION 6

Which of these is a coincident economic indicator?
 a. The demand for plant and machinery
  b. Personal income
 c. Real estate growth
 d. The interest rate
 e. The unemployment rate

QUESTION 7

The assumption(s) made to construct a kinked-demand oligopoly model is (are) that:
 a. all firms in the industry will ignore the price changes made by any one firm.
  b. any price decrease will be ignored, but price increases will be followed.
  c. all firms will follow a price decrease but will ignore any price increase.
  d. all price changes made by any firm will be followed by all of the other firms.
  e. price can go up, but it cannot go down.