Which of the following is NOT a characteristic of a perfectly competitive industry?
A) There is free entry and exit in the long run.
B) The industry demand curve is downward sloping.
C) Each firm produces the same homogeneous product.
D) Economic profits must be positive in the short run.
Answer: D
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A demand schedule relates prices of a particular good to quantities demanded
a. True b. False Indicate whether the statement is true or false
When the buyer knows less than the seller about the characteristics of the good being sold, there is
a. a principal-agent problem. b. a moral hazard problem. c. an adverse selection problem. d. a signaling problem.
Stabilization policy used during the Great Recession could be abstracted by a
A. decrease in aggregate demand. B. decrease in aggregate supply. C. increase in aggregate demand. D. increase in aggregate supply.
??Firm 2???High PriceLow PriceFirm 1High PriceFirm 1 earns $100; Firm 2 earns $100Firm 1 earns $25; Firm 2 earns $150?Low PriceFirm 1 earns $150; Firm 2 earns $25Firm 1 earns $50; Firm 2 earns $50Table 12.2In the game shown in Table 12.2, if Firm 1 believes that Firm 2 will choose the high price strategy, Firm 1 should:
A. choose the low price strategy. B. choose the high price strategy. C. refuse to play the game because Firm 1 will surely lose. D. choose a strategy at random because Firm 1 cannot control the outcome.