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
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?
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.