Kellogg's and General Mills are two of the dominant breakfast cereal manufactures in the U.S. Each firm can either sign or not sign an exclusive contract with an Olympian gold-medal athlete to appear on the cover of a cereal box
If both companies sign an athlete, they will each make $5 million in economic profit. If only firm signs, they earn $8 million in economic profit and the other firm incurs an economic loss of $1 million. If neither firm signs, they break even. Which of the following pairs of payoffs would NOT appear together in a square of the payoff matrix? A) $5 million; $5 million
B) $0 million; $0 million
C) $8 million; $5 million
D) -$1 million; $8 million
C
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A monopolistically competitive industry is like a purely competitive industry in that
A. each industry produces a standardized product. B. nonprice competition is a feature in both industries. C. firms in both industries face a horizontal demand curve. D. neither industry has significant barriers to entry.
With a price elasticity of demand of 0.45, when the price of soybeans falls by 10 percent, the quantity demanded of soybeans rises by approximately _____________ percent
A) 4.50 B) 45.0 C) 0.45 D) 0.56
Labor productivity increases when
A. output increases at the same rate as the labor force increases. B. output increases faster than population increases. C. the population increases. D. output increases even if the labor force has decreased.
Money is useful because it serves as a
A. good memorial to national leaders. B. stimulus to the printing industry. C. never wears out. D. store of value.