Based on the following game, what are the secure strategies for player 1 and player 2?
A. S1 and t2
B. S1 and t1
C. S2 and t2
D. S2 and t1
A firm chooses the institution to purchase inputs:
A. which minimizes the transactions costs of obtaining inputs.
B. in order to create more divisions.
C. which minimizes worker shirking.
D. to implement profit sharing.
The supply function
A. describes how much of good X will be produced at an alternative price of good X,
given all the other variables being constant.
B. recognizes that the quantity of a good produced depends on its price and supply
shifters.
C. shows the relationship between the quantity supplied of X and variables other than
its price.
D. does not include technology.
Advertising is an aspect of a firm’s:
A. performance.
B. structure.
C. environment.
D. conduct.
There are two existing firms in the market for computer chips. Firm A knows how to
reduce the production costs for the chip and is considering whether to adopt the
innovation or not. Innovation incurs a fixed setup cost of C, while increasing the
revenue. However, once the new technology is adopted, another firm, B, can adopt it
with a smaller setup cost of C/3. If A innovates and B does not, A earns $30 in revenue
while B earns $10. If A innovates and B does likewise, both firms earn $20 in revenue.
If neither firm innovates, both earn $10. If C = 12, which is the perfect equilibrium of
the game?
A. A innovates, B does not.
B. A innovates, B innovates.
C. Neither firm innovates.
D. None of the answers is correct.
Consider a monopoly where the inverse demand for its product is given by P = 50 – 2Q.
Total costs for this monopolist are estimated to be C(Q) = 100 + 2Q + Q2. At the
profit-maximizing combination of output and price, deadweight loss is:
A. $32.
B. $64.
C. $128.
D. cannot be determined with the given information.
At what level of output does marginal cost equal marginal revenue?
A. 1
B. 2
C. 3
D. 4
The production function Q = L.5K.5 is called:
A. Cobb Douglas.
B. Leontief.
C. linear.
D. None of the answers are correct.
Which of the following is a correct representation of the profit maximization condition
for a monopoly?
A. P = MR
B. MC = MR
C. P = ATC + MR
D. MR = MC + ATC
What is the maximum amount of good Y that can be purchased if X and Y are the only
two goods available for purchase and Px = $10, Py = $20, X = 0, and M = 400?
A. 10
B. 20
C. 5
D. 0
There are five firms in an industry with sales at $7 million, $6 million, $3 million, $2
million, and $2 million, respectively. The four-firm concentration ratio is:
A. 0.8.
B. 0.9.
C. 1.0.
D. 1.1.