Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect
A) one of the firms to select a high price and the other a low price.
B) one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period.
C) both to select high prices.
D) both to select low prices.
D
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The presence of efficiency, minimum and union wages
A) can explain job rationing because they lower the real wage rate below equilibrium. B) does not affect job rationing because they affect only the amount of job search. C) can explain job rationing because they raise the real wage rate above equilibrium. D) can explain job rationing because they lower the natural unemployment rate. E) cannot explain job rationing because they are a natural part of the economy.
Corporations, like individuals, face an alternative minimum tax (AMT).
A. True B. False C. Uncertain
When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed, total product is 9 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?
A) $3 B) $5 C) $15 D) $45
If the cost borne by a firm when output is zero is $100 and that of producing 5 units is $250, then the variable cost of the firm is equal to $150
a. True b. False Indicate whether the statement is true or false