Tastes for perfect substitutes are both homothetic and quasilinear.
Answer the following statement true (T) or false (F)
True
Rationale: The MRS for such tastes is the same everywhere --- which implies it is the same along any ray from the origin (required for homotheticity) and along any vertical or horizontal ray (implying quasilinearity in both goods).
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Which of the following describes a barrier to entry?
A) something that establishes a barrier to expanding output B) anything that protects a firm from the arrival of new competitors C) a government regulation that bars a monopoly from earning an economic profit D) firms already in the market incurring economic losses so that no new firm wants to enter the market E) Firms are legally prohibited from exiting the market in order to enter another market.
When you buy newly-issued shares of Twitter stock, this transaction takes place in the
A) bond market. B) bear market. C) primary market. D) secondary market.
Given the payoffs in the matrix shown, Firm B:
This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
A. should always choose to collude, regardless of Firm A's actions.
B. should always choose to compete, regardless of Firm A's actions.
C. should compete if Firm A competes and collude if Firm A colludes.
D. should compete if Firm A colludes and collude if Firm A competes.
When new goods are introduced, consumers have more variety from which to choose. As a result, each dollar is worth
a. more, and the cost of living increases. b. more, and the cost of living decreases. c. less, and the cost of living increases. d. less, and the cost of living decreases.