A direct relationship is expressed graphically as a:
A. positively sloped line or curve.
B. negatively sloped line or curve.
C. horizontal line.
D. vertical line.
Answer: A
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The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $4 per hour, how many hours do students work?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) None of the above answers is correct.
Which one of the following statements is TRUE for BOTH perfect competition and monopolistic competition?
A) Each type of firm faces a downward sloping demand curve. B) Each type of firm produces a homogeneous product. C) In the long run, firms in both industries make zero economic profit. D) Each type of firm competes on product quality and price.
For the single-price monopoly shown in the figure above, the deadweight loss is
A) zero. B) between $0 and $10. C) between $10.01 and $20. D) more than $20.01.
Suppose we want to use game theory to analyze how an oligopolist selects its optimal price. The cells of the payoff matrix show
A) the strategy that a firm must pursue to earn various levels of profit. B) the profit that each producer can expect to earn by pursuing a single strategy. C) the expected profits of rival firms. D) the profit that each producer can expect to earn from every combination of strategies by the firms in the market.