Which of the following is NOT a measure of market structure?
A. Entry conditions
B. Four-firm concentration ratio
C. Herfindahl-Hirschman index
D. Pricing behavior
Scarce resources are ultimately allocated toward the production of goods most wanted
by society because:
A. firms attempt to maximize profits.
B. they are most efficiently utilized in these areas.
C. consumers demand inexpensive goods and services.
D. managers are benevolent.
What price should a firm charge for a package of two shirts given a marginal cost of $4
and an inverse demand function P = 8 – 2Q by the representative consumer?
A. $4
B. $8
C. $12
D. $16
A B means:
A. bundle A is not preferred to bundle B.
B. bundle A is preferred to bundle B.
C. bundle A is equally preferred to bundle B.
D. bundle A is greater than bundle B.
Collusion in oligopoly is difficult to achieve because:
A. it is prohibited by law.
B. every firm has an incentive to cheat given that others follow the agreement.
C. firms usually take care of consumers’ interests as a decision priority.
D. it is prohibited by law and every firm has an incentive to cheat given that others
follow the agreement.
An increase in the marginal cost arising from a more complex specialized investment
environment will cause the optimal contract length to:
A. increase.
B. decrease.
C. remain constant.
D. either increase or decrease.
Orion and Zeda are the only producers of a unique product that is sold in a market
where the inverse demand curve is P = 200 – 2Q. The firms produce identical products
and have identical cost functions given by C(Qi) = 4Qi. The managers of each firm must
decide on their outputs on Monday morning and then bring products to market by
noon.a. What is each firm’s marginal revenue? Marginal cost?b. Equate each firm’s
marginal revenue to marginal cost.c. Use your result in part (b) to solve for each firm’s
reaction function.d. Use your results in part (c) to solve for the Cournot equilibrium
levels of output for each firm.
Suppose option A has a higher standard deviation than option B. Which of the following
statements is, in general, true?
A. A risk-averse person prefers option B to option A.
B. A risk-neutral person is indifferent between options A and B.
C. A risk-averse person prefers option A to option B.
D. Insufficient information to determine.
A manager who tries to enhance worker effort by tying workers’ compensation to the
profitability of the firm is using:
A. spot checks.
B. revenue sharing.
C. profit sharing.
D. piece rates.
Bottlenecks:
A. occur only in one-way networks.
B. occur only in two-way networks.
C. occur in both one-way and two-way networks.
D. are a positive externality associated with networks.
Suppose the production function is given by Q = K1/2L1/2, and that Q = 30 and K = 25.
How much labor is employed by the firm?
A. 49
B. 6
C. 36
D. 25