A perfectly competitive firm with a random demand has a ________ expected demand curve and ________ expected marginal revenue curve.
A) horizontal; horizontal
B) horizontal; vertical
C) vertical; vertical
D) vertical; horizontal
A) horizontal; horizontal
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In a game of bargaining, those who ________ will likely get the highest payoff.
A. are patient B. are cooperative C. collude D. have a commitment strategy
According to the law of demand, as the price of a good rises, _____.
a. buyers purchase more of the good because the higher price reflects an improvement in product quality b. buyers purchase less of the good because their real income decreases with an increase in price c. buyers purchase less of the good because they expect prices to fall in the future d. buyers purchase more of the good because they expect the price of a substitute good to rise e. buyers purchase more of the good because they expect prices to be even higher in the future
The hypothesis that suggests that one firm who fears the arrival of competitors is all that is required to experience most of the benefits of perfect competition is the
A. all-about-me hypothesis. B. rational-expectations hypothesis. C. contestable-markets hypothesis. D. law-of-demand hypothesis.
An example of a situation in which the social costs are greater than the private costs would be
A. a physician who cannot examine patients with a stethoscope in an examination room adjacent to an airport. B. a new restaurant takes business away from an established restaurant. C. hand-held calculators putting slide rule manufacturers out of business. D. when a member of a rock band's ability to hear deteriorates from performing in so many loud concerts.