Indifference curves have which of the following properties?
a. Higher indifference curves represent greater total satisfaction.
b. Indifference curves are negatively sloped
c. Indifference curves are convex from the origin.
d. All of the above.
d
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Suppose you are the manager of a large cardboard box industry. In the industry, there are 10 very large firms and 15 small firms. You are aware that the very large firms have a greater marginal benefit from industrywide advertising compared to the small firms. Which of the following payment plans is least likely to create discord across the participating firms?
A) Have each firm pay the exact same fee. B) Have each firm pay the average marginal benefit of industrywide advertising across all firms. C) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is greater than the fee paid by Group 2 firms. D) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is smaller than the fee paid by Group 2 firms.
Which of the following is true of price leadership?
a. Price leadership requires that firms collude. b. Price leadership will not exist when there is a dominant firm. c. Price leadership may come into being as firms recognize the benefits of not engaging in competitive pricing. d. Price leadership is most likely to arise when no firm has a history of making accurate evaluations of market conditions. e. Price leadership is never used in the real world.
The efficient scale of the firm is the quantity of output that
a. maximizes marginal product. b. maximizes profit. c. minimizes average total cost. d. minimizes average variable cost.
Suppose you have a money income of $10 all of which you spend on Coke and popcorn. In the above diagram, the prices of Coke and popcorn respectively are:
A) $.50 and $1.00. B) $1.00 and $.50. C) $1.00 and $2.00. D) $.40 and $.50.