Suppose that only 2 percent of all people are geniuses. If an IQ test indicates that Albert is a genius, but the test is only accurate 90 percent of the time, then the probability that Albert really is a genius is roughly:
A. 18 percent.
B. 16 percent
C. 10 percent.
D. 2 percent.
Answer: B
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Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price. The black market for gasoline is ________ market in which the price ________ ceiling price
A) a legal; exceeds the B) an illegal; exceeds the C) a legal; is less than the D) an illegal; is less than the E) an illegal; equals
When marginal private cost is less than marginal social cost,
A. a public good exists. B. a negative externality exists. C. a positive externality exists. D. negative economic profits are made. E. a and d
In a Nash equilibrium outcome for a two-firm balanced oligopoly
a. both firms avoid the worst case possible b. both firms end up in the worst case possible c. prices charged by both firms are relatively high d. profits earned by both firms are relatively high e. both firms form a cartel
The demand curve faced by a monopolistic ally competitive firm:
A. Is more elastic than the monopolist's demand curve B. Is less elastic than the monopolist's demand curve C. Will shift outward as new firms enter the industry D. Is more elastic than the demand curve faced by the purely competitive firm