Specialization leads to greater production than is otherwise possible
a. only if different workers have different natural abilities
b. only if production is organized within business firms
c. under capitalism, but not under communism
d. even if different workers have identical natural abilities
e. under communal ownership, but not under capitalism
D
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Stan, who is risk averse, can invest in project A or project B. Project A returns $3,000 with probability 1/2 and $9,000 with probability 1/2. Project B returns nothing with probability 1/2 and $12,000 with probability 1/2. For Stan, project A has
A) greater expected wealth and greater expected utility than project B. B) lower expected wealth and lower expected utility than project B. C) the same expected wealth and the same expected utility as project B. D) the same expected wealth but higher expected utility than project B.
The Prisoners' Dilemma is a particular type of game in which negotiation and enforcement of binding contracts is not possible, and such games are known as:
A) cooperative games. B) noncooperative games. C) collusive games. D) Cournot games.
Which of the following is true of the relationship between price and marginal cost under monopolistic competition?
a. P = MC at all levels of output b. P = MC only at the profit-maximizing quantity c. P > MC at the profit-maximizing quantity d. P < MC at the profit-maximizing quantity e. P < MC at the quantities below the profit-maximizing quantity
When there is no other way of producing a given level of output with a smaller total value of inputs, the firm is operating at:
a) maximum profit. b) an irrelevant output. c) maximum output. d) minimum cost. e) optimal output.