The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency.
b. even if business firms fail to produce goods efficiently.
c. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
d. even when market participants care only about their own self interests rather than about the overall efficiency of resource use.
d. even when market participants care only about their own self interests rather than about the overall efficiency of resource use.
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Two competing firms in a duopoly must decide whether or not to offer consumers a coupon for their good. The payoff matrix above represents the daily profit available to the firms under the different coupon strategies
a. What strategies and payoffs are represented by quadrant A? b. What strategy will Firm 1 pursue if it believes that Firm 2 is offering a coupon? c. What quadrant represents the equilibrium that will result if the firms act independently (compete)? d. What quadrant represents the equilibrium that will result if the firms successfully collude?
Refer to Figure 9.2. At price 0E and quantity Q*, consumer surplus is the area
A) 0FCQ*. B) AFC. C) EFC. D) AEC. E) none of the above
MC equals
A. ?VC/?Q. B. VC/Q. C. ?TC/?Q. D. FC/Q.
In the figure above, the wage rate is $600 and total fixed cost is $15,000. When there are 40 workers, what is average variable cost?
A. $12.00 B. $5.00 C. $6.00 D. $4.10 E. $0.23