A factor of production is the same as
a. the amount of a good produced
b. the price of a good
c. a profit of a firm
d. an opportunity cost
e. a resource
E
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In the 1970s we had _____ recessions and in the 1980s we had _____ recessions.
Fill in the blank(s) with the appropriate word(s).
In deciding what to buy to maximize utility, the consumer should choose the good with the
A. highest marginal utility per dollar spent. B. lowest price. C. lowest marginal utility per dollar spent. D. highest marginal utility.
MegaCable and Acme are competing for an exclusive contract to provide the city of Dustin with cable television for the next year. The firm that wins the contract will earn an economic profit of $5 million. The contact will be awarded to the firm that spends the most on lobbying. If both firms spend the same amount on lobbying, then the winner will be determined by a coin flip, so each will have a 50 percent chance of winning. If both firms refrain from spending anything on lobbying, the expected profit from the contract is:
A. $2 million. B. $2.5 million. C. $1 million. D. $5 million.
Answer the next question based on the following payoff matrix for two oligopolistic firms 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 the two firms collude to maximize joint profits, there will be
A. no incentive for either firm A or firm B to cheat. B. an incentive for firm B to cheat and earn more if firm A does not switch strategies. C. an incentive for firm A to cheat and earn more if firm B does not switch strategies. D. incentives for both firm A and firm B to cheat.