There is only one firm in the market. The economist analyzing that market has said she would expect the price to equal the firm's average total costs.
A. She must be analyzing this market using a game theory model.
B. She must be analyzing this market using a contestable market model.
C. She must be analyzing this market using a cartel model.
D. She must not be an economist, because that answer is clearly wrong.
Answer: B
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When all relevant information is used to forecast inflation, the resulting forecast is called
A) a rational expectation.
B) a natural expectation.
C) an expected forecast.
D) an expansionary expectation.
E) the expected expectation.
Game theory is
A. The study of decision making in situations where strategic interaction occurs between rivals. B. Practiced by perfectly competitive firms. C. The study of price-fixing and collusion. D. An explanation of how oligopolists become monopolists.
Refer to the information provided in Figure 23.3 below to answer the question(s) that follow.
Figure 23.3Refer to Figure 23.3. The equation for the aggregate saving is
A. S = -200 + 0.6Y. B. S = -140 + 0.5Y. C. S = -60 + 0.3Y. D. S = -80 + 0.4Y.
The price elasticity of demand for a textbook is estimated to be 1 no matter what the price or quantity demanded. In this case:
A. A 10 percent increase in price will result in a 10 percent increase in total revenues B. A 10 percent increase in price will result in a 10 percent decrease in the quantity demanded C. A 10 percent increase in price will result in a 10 percent decrease in total revenues D. A 10 percent increase in price will result in a 10 percent increase in quantity demanded