Most U.S. firms face:
A. perfect competition.
B. some degree of competition.
C. market power resting in a few large firms in every industry.
D. no competition at all.
B. some degree of competition.
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The bowed-out shape of the production possibilities curve shows that as more of one product is produced,
a. the opportunity cost per unit will increase. b. the opportunity cost per unit will decrease. c. the opportunity cost per unit stays the same. d. the production possibilities curve shifts inward.
In Eastern Europe and the countries of the former Soviet Union,
a. grave environmental problems plague Eastern Europe. b. the area suffers from widespread illness and countless premature deaths. c. the Aral Sea, once the world's fourth-largest inland sea, is now half its previous size. d. All of the above are correct.
Would the maximin criterion achieve perfect income equality?
a. Yes. There would be no way to reallocate resources to raise the utility of the poor. b. Yes. The maximin criterion would eliminate poverty. c. No. It is impossible for complete equality to benefit the worst-off people in society. d. No. Complete equality would reduce incentives to work, which would reduce total income, which would reduce the incomes of the worst-off people in society.
Consider the game tree in Figure 12.8. If both stores' payoffs in the bottom rectangle were $250 instead of $300, the outcome of the game will be that:
A. both stores choose to advertise. B. both stores choose not to advertise. C. Store A chooses to advertise but Store B chooses not to advertise. D. Store B chooses to advertise but Store A chooses not to advertise.