In the game in Scenario 13.17, who moves first?
A) Potential Entrant
B) Incumbent Monopoly
C) It's a sequential game; firms alternate moving first.
D) Both players move simultaneously.
E) Who moves first is decided by the equilibrium.
A
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Technology is best defined as
A) society's pool of applied knowledge concerning the production of goods and services. B) the maximum output that can be obtained from a stock of physical capital. C) output inside the production possibilities curve. D) the utilization of more resources for the same amount of production.
When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes:
A. an inferior good. B. the rationing function of prices. C. the substitution effect. D. the income effect.
The government imposes a tax on an industry that produces goods creating a negative externality. Yet the industry produces more than the optimum quantity of output. This means
A) the tax is more than the external cost associated with the product. B) the tax is less than the external cost associated with the product. C) the company should advertise the product more. D) the company should increase the production of the product.
(Last Word) Classical macroeconomics was dealt severe blows by:
A. the Great Depression and Keynes's macroeconomic theory. B. the Second World War and the writings of Milton Friedman. C. Adam Smith and his idea of the invisible hand. D. the strong recovery after the Second World War and Alvin Hansen's stagnation thesis.