Firm A has been dealing in baby food products for the past 10 years and enjoys a good market share. Suppose a new firm enters the market to capitalize on the increasing demand for such products. However, the products of the new firm fail to attract customers. The failure of the new firm is due to
A. the learning curve effect.
B. scale economies.
C. the pioneering brand advantage of the incumbent.
D. the specific assets owned by the incumbent.
Answer: C
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Where pollution is concerned, if an automobile driver considers only the internal costs of his actions, he is apt to
A) use resources very carefully and in small quantities. B) garage his car and drive very seldom. C) be making a positive contribution to the greater community. D) drive too much and use up more scarce resources than he would if he had to cover all his costs.
The marginal cost curve crosses
a. both the average total cost and average variable cost curves at their respective minimum points b. the average total cost curve at its minimum point, and the average variable cost curve at its maximum point c. the average total cost curve and the average variable cost curves at the same output level d. both the average total cost and average variable cost curves at their respective maximum points e. the average total cost curve at its maximum point, and the average variable cost curve at its minimum point
New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order
A. a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real Gross Domestic Product (GDP), an upward movement along the short-run aggregate supply curve, and an increase in the price level. B. an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real Gross Domestic Product (GDP), an upward movement along the short-run aggregate supply curve, and an increase in the price level. C. a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real Gross Domestic Product (GDP), a downward shift in the short-run aggregate supply curve, and a decrease in the price level. D. a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real Gross Domestic Product (GDP), an upward shift in the short-run aggregate supply curve, and an increase in the price level.
Game theory is most useful in understanding the decision making behavior of firms in which type of industry?
a. perfect competition b. monopoly c. monopolistic competition d. natural monopoly e. oligopoly