If firms are in Cournot equilibrium:
A. firms could increase profits by jointly increasing output.
B. firms could increase profits by jointly reducing output.
C. each firm could increase profits by unilaterally decreasing output.
D. each firm could increase profits by unilaterally increasing output.
Answer: B
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Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo, Oklahoma. The above figure represents the demand, marginal revenue, and marginal cost curves for this establishment. If the Busy Bee produces 40 hamburgers per hour, then
A) marginal revenue will exceed marginal cost. B) profit will be maximized. C) marginal revenue will be negative. D) marginal revenue will be maximized. E) both the marginal revenue and the price will be negative.
Making decisions with outcomes are uncertain is ________ and ________.
A) common; easy B) uncommon; easy C) common; difficult D) uncommon; difficult
If the cost of transportation increases by 20 percent, then, other things the same, the CPI is likely to increase by about
a. 0.3 percent. b. 1.6 percent. c. 3.2 percent. d. 10 percent.
Which of the following statements is TRUE about profits?
A. Profits are excluded from the circular flow of the income diagram. B. The only portion of profits that are included in the circular flow diagram are the portion paid out in the form of dividends. C. Profits are considered a cost of doing business. D. Profits are considered one of the resources necessary for production.