A perfectly competitive industry is in long-run equilibrium. If demand for the product increases, we can expect the price of the good to:
A. rise at first and then fall.
B. fall at first and then rise.
C. rise and remain at the higher price.
D. fall and remain at the lower price.
Answer: A
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Refer to Figure 3.6. Answer the following questions about the game represented in the figure:
a. What type of game is represented by the payoff matrix? b. Does Terrance have a dominant strategy, and if so, what is it? c. Does Phillip have a dominant strategy, and if so, what is it? d. At what outcome or outcomes do the players coordinate? e. Are there any Nash equilibria, and if so, what, are they?
Personal consumption expenditures include
a. all goods that business firms buy b. the purchase prices paid for stocks and bonds by individual households c. the construction of residential housing d. all goods and services bought by households e. the corrected value of housewives' services
Spot checks:
A. monitor the effort of workers precisely. B. must be frequent enough to induce workers not to risk getting caught shirking. C. measure presence only. D. are the same as spot markets.
For a firm in a perfectly competitive industry, the demand curve for its own product is
A) downward sloping. B) vertical. C) always above the marginal revenue curve. D) the same as the marginal revenue curve.