Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, and if at Job B the $20 outcome occurs with probability .1, and the $50 outcome occurs with probability .9, then
A) Job A is safer because the difference in the probabilities is lower.
B) Job A is riskier only because the expected value is lower.
C) Job A is riskier because the standard deviation is higher.
D) Job B is riskier because the difference in the probabilities is higher.
E) There is no definite way given this information to tell how risky the two jobs are.
C
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A major distinction between a monopolistically competitive firm and an oligopolistic firm is that
A. one is a price taker and the other is a price maker. B. one necessarily faces a downward-sloping demand curve and the other a horizontal demand curve. C. one always produces differentiated products and the other always produces a homogeneous product. D. a recognized interdependence exists between firms in one industry but not in the other.
Refer to Table 2-10. Which of the following statements is true?
A) Barney has a comparative advantage in making unicycles and Fred in making pogo sticks. B) Barney has a comparative advantage in making pogo sticks and Fred in making unicycles. C) Barney has a comparative advantage in making both products. D) Fred has a comparative advantage in making both products.
Market failure implies that
a. in the real word, the market fails to achieve equilibrium b. with an unequal distribution of income, the market will fail to provide sufficient goods to the poor c. when externalities are present, the market will fail to provide the socially optimal price and output d. negative externalities are greater than positive externalities so that the market fails to create an efficient outcome e. the inability of the market to solve the problem of unnecessary demand is caused by persuasive advertising
The MR = MC rule applies:
A. in the short run but not in the long run. B. in the long run but not in the short run. C. in both the short run and the long run. D. only to a purely competitive firm.