The price of an hour of leisure time for a successful lawyer is ________ the price of an hour of leisure for an unemployed high school drop-out.
A. greater than
B. the same as
C. less than
D. impossible to compare to
Answer: A
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Two firms engage in Bertrand competition in differentiated products. After doing all the appropriate calculations, you find the best-response functions are PB = 2.5 + .15PC and PC = 1.5 + .075PB. Without doing any further calculations, can you determine the relationship between their Nash equilibrium prices?
a. Yes, PB > PC b. Yes, PC > PB c. Yes, PB = PC d. No; it cannot be determined.
When the foreign price level falls, domestic goods become more expensive relative to foreign goods, causing domestic net exports and aggregate demand to fall
a. True b. False Indicate whether the statement is true or false
Why do airlines tend to lower ticket prices in the winter?
a. Supply is relatively variable, and a drop in demand lowers equilibrium price. b. Demand is relatively variable, and a drop in supply lowers equilibrium price. c. A drop in both supply and demand lowers equilibrium price. d. Supply is relatively fixed, and a drop in demand lowers equilibrium price. e. Demand is relatively fixed, and a drop in supply lowers equilibrium price.
Tom tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $155 per tuning. One particular week, Tom is willing to tune the first piano for $120, the second piano for $125, the third piano for $140, and the fourth piano for $160 . Assume Tom is rational in deciding how many pianos to tune. His producer surplus is
a. $95. b. $80. c. $75. d. $60.