Bart is seen standing in front of the cooler that contains containers of iced tea and lemonade. Moments later, we see Bart drinking iced tea, and we conclude Bart is getting more utility from that drink than lemonade. We drew that conclusion based on what economic concept?
A. Revealed preference
B. Utility minimization
C. Satisfaction scales
D. Rational behavior
A. Revealed preference
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Answer the next question based on the following payoff matrix for two oligopolistic firms in which the numbers indicate the economic profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceA = $625A = $725??B = $625B = $475?Low priceA = $475A = $400??B = $725B = $400If both firms operate independently and do not collude, the most likely economic profit is
A. $625,000 for firm X and $625,000 for firm Y. B. $475,000 for firm X and $725,000 for firm Y. C. $400,000 for firm X and $400,000 for firm Y. D. $725,000 for firm X and $475,000 for firm Y.
The magnitude of the government expenditure multiplier is ________ the magnitude of the tax multiplier
A) not comparable to B) greater than C) less than D) equal to E) greater than for expansionary policy and less than for contractionary policy
Macroeconomics seeks to understand
A) product demand, product cost, and profit maximization. B) industry sales, marketing strategies, and corporate growth. C) public choices, private choices, and consumer maximization. D) economic growth, business cycles, and inflation.
Which of the following statements about an increasing-returns-to-scale industry is not true?
a. It will tend to concentrate production in the hands of a very few large firms. b. Firms in the industry face higher costs per unit of production as their level of output increases. c. Opportunity costs may fall with the level of output. d. Proponents of strategic trade policy contend that tariffs can be used to stimulate production by a domestic industry capable of achieving increasing returns to scale. e. The costs of producing a unit of output fall as more output is produced.