The short-run Phillips curve is based on the classical dichotomy
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following four firms would most likely be part of a perfectly competitive market?
A) Village Pizza sells NY style pizza and hard-to-find microbrews in a college town. B) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave. C) Mark sells the tomatoes he grew in his backyard at the local farmers market. D) Amara Massage specializes in pre- and post-natal massage.
The more elastic the demand for a good, the smaller the deadweight loss from the tax imposed on the good
a. True b. False Indicate whether the statement is true or false
Mel is thinking of going on a cruise. Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50. The probability of nice weather is 60 percent and the probability of bad weather is 40 percent. Trip insurance is sometimes available. If purchased, it allows travelers to delay the cruise until the weather is nice. Suppose that the price of the cruise is $1,200. If Mel is risk-neutral, then Mel should:
A. only buy trip insurance if it costs less than $20. B. not buy trip insurance. C. only buy trip insurance if it costs less than $780. D. only buy trip insurance if it costs less than $50.
A Nash equilibrium is
A) reached when an oligopoly's market demand and supply intersect. B) reached when each player chooses the best strategy for himself and for the group. C) reached when each player chooses the best strategy for himself, given the other strategies chosen by the other players in the group. D) an equilibrium comprising non-dominant strategies only.