For a profit-maximizing monopolistically competitive firm, marginal revenue equals marginal cost in
a. the short run but not in the long run.
b. the long run but not in the short run.
c. both the short run and the long run.
d. neither the short run nor the long run.
c
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Suppose that you face a gamble that has a payoff of $1000 with probability 0.2 and a payoff of $200 with probability 0.8. I approach you to sell you insurance with a premium of p and a benefit of b. Which combinations of p and b are actuarily fair?
A. p=8, b=10 B. p=400, b=500 C. p=720, b=900 D. (a) and (b) are actuarily fair E. (a) and (c) are actuarily fair F. (b) and (c) are actuarily fair G. All of the above. H. None of the above.
The Baker Plan for addressing the debt crisis was based on the assumption that
A) most countries would eventually default on their debt. B) forgiveness of some of the debt was inevitable. C) renewed lending by U.S. and European banks would undermine push for economic reforms. D) hyperinflation would eventually reduce the real value of the debt. E) renewed lending by U.S. and European banks would restore growth and make the debt manageable.
A good policy ________________ and a bad policy _________________
a. Moves an asset to higher value use; moves an asset to lower value use b. Moves an asset to lower value use; moves an asset to higher value use c. Refrains from any government intervention; concentrates on government intervention d. Concentrates on government intervention; refrains from government intervention
A major difference between monopolistic competition and perfect competition is
A) that products are not standardized in monopolistic competition unlike in perfect competition. B) the barriers to entry in the two markets. C) the degree by which the market demand curves slope downwards. D) the number of sellers in the markets.