Two firms compete in a Stackelberg fashion. If firm 2 is the leader, then:
A. firm 1 views the output of firm 2 as given.
B. Both firm 1 views the output of firm 2 as given and firm 2 views the output of firm 1 as given are correct.
C. firm 2 views the output of firm 1 as given.
D. None of the answers is correct.
Answer: A
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If the government provides a subsidy to producers, what is the effect of this policy in a supply and demand diagram?
A) The demand curve shifts leftward and the price rises. B) The supply curve shifts rightward and the price falls. C) The supply curve shifts leftward and the price falls. D) The supply curve shifts leftward and the price rises. E) The demand curve shifts rightward and the price rises.
The free rider problem is caused by the:
A. nonexcludability of a good leading to the undersupply of it. B. incentive to oversupply the good since it is nonrival in consumption. C. "rivalness" in consumption of a good leading to the overconsumption of that good. D. "rivalness" in consumption of a good leading to the undersupply of it.
In recent decades labor markets in European countries like Italy and Spain have been
What will be an ideal response?
The above table shows Priscilla's marginal utility from the two goods she consumes, pizza and Pepsi. The price of a slice of pizza is $2 and of a can of Pepsi is $1. Suppose Priscilla has $6 to spend. If Priscilla chooses to eat 3 slices of pizza
A) she is maximizing her total utility. B) she is not equating marginal utility per dollar for pizza and Pepsi. C) she is not at a consumer equilibrium. D) Both answers B and C are correct.