The goal of product differentiation and advertising in monopolistic competition is to make:
A. the firm allocatively efficient even if it is not productively efficient.
B. price more of a factor and product differences less of a factor in consumer purchases.
C. price less of a factor and product differences more of a factor in consumer purchases.
D. the firm productively efficient even if it is not allocatively efficient.
Answer: C
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The adverse selection problem in international investment means
A) that those seeking funds for the riskiest projects are those most actively seeking the funds. B) that the recipients of the funds may use the funds for other than the approved projects. C) that government officials may demand higher than the usual amount of bribes. D) those in the highest levels of government are the most dishonest.
Which of the following is a difference between taxing buyers and taxing sellers?
a. Taxing buyers results in a decrease in equilibrium quantity, whereas taxing sellers results in an increase in equilibrium quantity. b. Taxing buyers results in an increase in equilibrium quantity, whereas taxing sellers results in a decrease in equilibrium quantity. c. Taxing buyers results in a decrease in equilibrium price, whereas taxing sellers results in an increase in equilibrium price. d. Taxing buyers results in an increase in equilibrium price, whereas taxing sellers results in a decrease in equilibrium price.
A price-setting firm faces the following estimated demand and average variable cost functions:Qd = 800,000 - 2,000P + 0.7M + 4,000PRAVC = 500 - 0.03Q + 0.000001Q2where Qd is the quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $53. Total fixed cost is $2,600,000. What is the profit-maximizing choice of output?
A. 20,000 units B. 12,000 units C. 10,000 units D. 8,000 units E. 0 units, the firm shuts down
When individual supply curves shift, ceteris paribus, the market supply curve shifts.
Answer the following statement true (T) or false (F)