A sudden rise in the market demand in a competitive industry leads to
a. A short run market equilibrium price lower than the original equilibrium
b. A market equilibrium higher than the short run price
c. Entry of new firms into the market
d. All of the above
c
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In the ultimatum game, allocators usually offer recipients at least a 40 percent share of the money, and recipients almost always reject offers of less than a 10 percent share
Which of the following does not explain why allocators offer recipients a relatively generous share and why recipients reject meager offers? A) Some people are careful not to engage in economic behavior that might offend and alienate others. B) People can and often do reject offers that offend their sense of fairness even if doing so means taking a monetary loss. C) Allocators can count on recipients to ignore all considerations except financial benefit. D) Fear of arousing outrage and abhorrence could influence economic decisions.
Information on the price elasticity of demand is particularly important to managerial decision making because:
A) the higher the price elasticity of demand for a product is, the more profitable it will be to produce more of it. B) depending on the elasticity coefficient, decision makers will immediately know if a price change will cause profits to increase or decrease. C) it allows one to predict how total revenue will respond, i.e., increase or decrease, to a change in price. D) as the price elasticity coefficient approaches one, profits will increase.
Everything else held constant, a decrease in net taxes will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Consuming one more of a good increases its marginal-utility-to-price ratio, and consuming one less of the other good lowers its marginal-utility-to-price ratio
Indicate whether the statement is true or false