Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, sector X will likely see ________ and sector Y will likely see ________.
A. the entrance of new firms; the exit of existing firms
B. no entry or exit of firms; the exit of existing firms
C. the entrance of new firms; no entry or exit of firms
D. the exit of existing firms; the entrance of new firms
Answer: A
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A dominant strategy:
A. exists in every game. B. is the best one to follow no matter what strategy other players choose. C. is always the same for all players of a game. D. awards the highest achievable payoff in a game.
Which of the following groups of people would be included in the official unemployment rate?
a. part-time workers b. workers temporarily laid off from jobs to which they expect to return c. discouraged workers d. all of the above
The spirit of equating marginal cost with marginal revenue is NOT held by:
A. oligopolistic firms. B. perfectly competitive firms. C. perfectly competitive firms and oligopolistic firms. D. None of the answers is correct.
Consider the current peso/dollar exchange rate is 100 pesos per dollar and the current inflation rate in Mexico and the U.S. is 3 percent in each country. Assuming purchasing power parity, what will the exchange rate be if the inflation rate increases to 5 percent in Mexico and falls to 2 percent in the U.S.?
What will be an ideal response?