The condition where firms want to sell more than consumers want to buy is called
A. a market collapse.
B. an equilibrium.
C. a shortage.
D. a surplus.
Answer: D
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The less elastic the supply, the
A) less likely the government is to tax the product. B) less likely the government is to impose a price ceiling. C) larger the fraction of any tax imposed on the product that is paid by the suppliers. D) less elastic the demand.
Suppose the market demand curve for a Bertrand duopoly is downward sloping. What happens to the Nash equilibrium price and market quantity if the constant marginal cost declines?
A) Price and quantity decline B) Price increases and quantity declines C) Price decreases and quantity increases D) Price and quantity increase
The best test of an economic theory is: a. the rigor of its mathematical formulation. b. its ability to explain and predict
c. the accuracy of its assumptions. d. the level of real-world detail it captures.
Which of the following is the least likely to be investment?
A. a household buying a new house B. a household saving for retirement C. GM building a new factory D. a car dealer adding to its cars on hand