Figure 13-3
?
Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors retaliate with identical price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?
A. B
B. C
C. D
D. E
Answer: C
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In a market with information asymmetry, gains from trade occur if:
A) the value of the good to the seller is greater than its value to the buyer. B) the value of the good to the buyer is greater than its value to the seller. C) the variable cost of producing the good is zero. D) the opportunity cost of consuming the good is zero.
Refer to Figure 10-4. What is the marginal rate of substitution for one bar of chocolate between g and h?
A) of a cookie. B) of a cookie. C) 2 cookies. D) 3 cookies.
A firm that engages in efficient production
A) cannot produce the same output with fewer inputs. B) could produce the same output with fewer inputs if it wanted to. C) is not interested in profit maximization. D) uses old technology to minimize costs.
According to the hypothesis of New Keynesian inflation dynamics, an increase in aggregate demand brings about
A) initial sluggish adjustment of the price level followed by higher inflation later on. B) initial rapid adjustment of the price level followed by lower inflation later on. C) initial sluggish adjustment of real GDP followed by more rapid real GDP growth later on. D) sluggish growth in real GDP both initially and later on.