A firm in a perfectly competitive industry will expand output as long as:
a. marginal revenue is less than average revenue.
b. marginal cost is less than marginal revenue
c. marginal cost is less than average total cost.
d. marginal revenue is less than average total cost.
b
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The ceteris paribus assumption is a behavioral assumption.
a. True b. False
Suppose the price of a good rises. When will the resulting income effect reduce the quantity demanded of the good?
a. Always. b. Whenever the good is a non-Giffen good. c. Only when the good is normal. d. Only when the good is inferior.
The side of the market that will bear a greater share of the tax burden is the side that:
A. responds more to a change in prices. B. is more inelastic. C. changes quantity by a larger percentage when the price changes by a given percentage. D. bears the statutory burden of the tax.
In the prisoner's dilemma game:
A. both players have a dominant strategy. B. neither player has a dominant strategy. C. only one player will ever have a dominant strategy. D. All of these may be true in a prisoner's dilemma game.