Which of the following is a predictable side effect of increased government activity (for example, taxes and subsidies) designed to redistribute income among citizens?
a. improvement in the operational efficiency of government agencies
b. budget surpluses
c. reduction in the poverty rate
d. an increase in rent-seeking activity
D
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Answer the next question based on the following payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. Firm A? High PriceLow PriceFirm BHigh priceA = $250A = $325??B = $250B = $200?Low priceA = $200A = $175??B = $325B = $175If firm A adopts the high-price strategy, then firm B would adopt the
A. low-price strategy and earn $175. B. low-price strategy and earn $325. C. high-price strategy and earn $250. D. high-price strategy and earn $200.
If the price of X falls, the budget constraint
a. shifts outward in a parallel fashion. b. shifts inward in a parallel fashion. c. rotates outward about the X-intercept. d. rotates outward about the Y-intercept.
Using time-series data, the demand function for a profit-maximizing monopolist has been estimated asQd = 142,000 - 500P + 6M - 400PRwhere Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2014 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:MC = 200 - 0.024Q + 0.000006Q2Total fixed cost is forecast to be $500,000 in 2016. The firm's forecasted profit (loss) in 2016 is
A. a loss of $500,000. B. a profit of $908,000. C. a loss of $100,000. D. a profit of $100,000. E. a profit of $500,000.
A period in which real GDP in the economy declines for at least six months is referred to as:
A. long term growth. B. a recession. C. a positive fluctuation. D. living standards.