The fact that the behavior of one firm depends on the behavior of other firms is what differentiates oligopoly markets from the other three market structure types (perfect competition, monopoly, and monopolistic competition).
Answer the following statement true (T) or false (F)
True
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Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?
a. (quantity demanded = 4, price = $2.50)
b. (quantity demanded = 16, price = $2.50)
c. (quantity demanded = 3, price = $1.50)
d. (quantity demanded = 10, price = $1.00)
What prevents a firm from offering a delayed-compensation scheme to its employees and then firing each worker when the worker's wage exceeds his or her value of marginal product?
A. Profits would increase by allowing the worker to continue on. B. The firm would lose the trust of the workers, and new workers would not accept the payment scheme. C. Firms that offer delayed-compensation schemes are legally barred from firing workers. D. Profits are insensitive to when the worker quits his job. E. The worker will have already retired by the time the worker's value of marginal product exceeds his or her wage.
What is the monetarist prescription for the reducing unemployment, and why?
What will be an ideal response?
Refer to Table 5.4. If at Job B the $20 outcome occurs with probability .2, and the $50 outcome occurs with probability .8, then in absolute value
A) Y = Z = $6. B) Y = Z = $24. C) Y = Z = $35. D) Y = $24; Z = $6. E) Y = $6; Z = $24.