Assume a firm purchases resources a and b under purely competitive conditions and combines these resources to produce X. Product X is sold in a purely competitive market. The MPs of a and b are 6 and 3 respectively and the prices of a and b are $12 and
$6 respectively. If equilibrium exists, the price of X will be:
A. $1.
B. $.50.
C. $2.
D. $5.
Answer: C
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In the above figure, if five million CDs per month are produced and consumed, that is
A) better than producing and consuming four million CDs because more is always better than less. B) more than the efficient quantity because the marginal social benefit exceeds the marginal social cost. C) more than the efficient quantity because the marginal social cost exceeds the marginal social benefit. D) less than the efficient quantity because the opportunity cost exceeds the marginal social benefit.
The clearing corporation associated with the Chicago Board of Trade consists of
A) government regulatory bodies. B) major commercial banks. C) members of the exchange. D) major corporations.
Which of the following is an example of structural unemployment?
A. Alan, a software engineer, lost his job when the internet startup he worked for went bankrupt. He interviewed with five companies in the area before taking a job with another firm in the industry. B. Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has been unemployed for over a year. C. Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up. D. Jim had a job as an engineer, but quit when his wife was transferred to another state. He looked for a month before finding a new job that he liked.
Refer to the payoff matrix below. If each cell has a probability of occurrence of 0.25, what are Cruise R Us' expected profits?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) $5 B) $8 C) $3 D) $9