The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement. 
For Bagel World, ________ is a ________.
A. cheating on the agreement; dominated strategy
B. abiding by the agreement; dominant strategy
C. abiding by the agreement; dominant strategy when Bagels'R'Us also abides
D. cheating on the agreement; dominant strategy
Answer: D
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The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is $5 a ride
Motorville taxicab drivers want to obtain government's permission to raise the fare to increase their revenues and ask you to be their economic adviser. After studying the market, you come up with the following demand schedule for taxicab rides: a) Calculate the price elasticity of demand for taxicab rides as the fare rises from $5 to $6. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare rise? b) What happens to the taxicab drivers' total revenue if the fare rises from $5 to $6? How can you use your answers in part a to answer this question? Should the drivers try to obtain permission to raise the fare? c) Calculate the price elasticity of demand for taxicab rides as the fare falls from $5 to $4. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare decrease? d) What happens to the taxicab drivers' total revenue if the fare falls from $5 to $4? How can you use your answers in part c to answer this question? Should the drivers try to obtain permission to lower the fare? e) What fare will maximize the taxicab drivers' total revenue? Explain.
Gross revenue minus explicit and implicit costs is equal to
A) net worth. B) accounting profit. C) economic profit. D) opportunity cost.
Which of the following is a difference between the White test and the Breusch-Pagan test?
A. The White test is used for detecting heteroskedasticty in a linear regression model while the Breusch-Pagan test is used for detecting autocorrelation. B. The White test is used for detecting autocorrelation in a linear regression model while the Breusch-Pagan test is used for detecting heteroskedasticity. . C. The number of regressors used in the White test is larger than the number of regressors used in the Breusch-Pagan test. D. The number of regressors used in the Breusch-Pagan test is larger than the number of regressors used in the White test.
Downward sloping long-run supply curves occur in markets
A) with learning-by-doing. B) with increasing returns to scale. C) with constant returns to scale. D) Either A or B