As compared to a perfectly competitive firm, a monopolistically competitive firm will:
A. have more control over price.
B. have less control over price.
C. face more barriers to entry.
D. face many more competitors.
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. The Battle of the Sexes game has two Nash equilibria, neither of which is Pareto optimal. 2. All outcomes in the Copycat Game are Nash equilibria. 3. A solution concept is any way of analyzing a game which leads to the discovery of a Nash equilibrium which solves the game. 4. The concept of Nash Equilibrium is an important solution concept because it helps make predictions. 5. When a game has more than one Nash equilibrium, it is unlikely that a stable equilibrium will ever be reached.
Suppose the price of a DVD is $15 per unit. At that price, consumers wish to purchase 6,000 units weekly and producers wish to sell 4,000 units weekly. In this situation,
a. unsatisfied consumers will bid up the market price. b. the market price will fall because producers are unsatisfied. c. the price will rise and the demand will fall to bring the market to equilibrium. d. supply will increase by 2,000 units in order to satisfy consumers.
The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to describe reality. One manifestation of this fact is Trefler's Case of Missing Trade. Explain what exactly is missing
In what sense is it missing? How would you explain why it is missing? How can a relaxation of the identical production functions explain the case of the missing trade? How did the results obtained by Davis and Weinstein strengthen support for the validity of the HO model?
According to the above figure, if steel mills ignore the cost of pollution, the equilibrium quantity of steel will most likely be
A) Q1. B) Q2. C) Q2 - Q1. D) none of the above.