Rent seeking creates incentives for firms to use resources efficiently.
Answer the following statement true (T) or false (F)
False
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A perfectly competitive firm will shut down in the short run when marginal revenue equals marginal cost at a price less than minimum average variable cost
a. True b. False Indicate whether the statement is true or false
If an insurance policy is actuarially fair, then:
A. M = ?(1 - B) B. ? = B(1 - M) C. B = M(1 - ?) D. M = B(1 - ?)
Mark spends his weekly income on gin and cocktail olives. The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Mark's income has stayed fixed at $46 per week. If you measure gin on the vertical axis and cocktail olives on the horizontal axis, then the budget constraint
a. is steeper after the price changes. b. is flatter after the price changes. c. is the same after the price changes. d. shifts in a parallel fashion to the old budget constraint after the price changes.
Which outcome represents the level of joint profit maximization?
a. Each firm charges $9.
b. Each firm charges $10.
c. Firm A charges $10 while Firm B charges $9.
d. Firm B charges $10 while Firm A charges $9.