A strategic pre-commitment occurs when a firm:
A. commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit.
B. commits to some actions after rivals take theirs, with the aim of increasing its future competitive profit.
C. commits to some actions before rivals take theirs purely by accident.
D. commits to some actions after rivals take theirs because there are no other options.
A. commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit.
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Which of the following is TRUE when a budget deficit exists?
A) Dissaving exists. B) Tax revenues exceed government expenditures. C) A trade surplus exists. D) Government expenditures exceed tax revenues.
Suppose that electricity producers create a negative externality equal to $5 per unit. Further suppose that the government gives a $5 per-unit subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.
Dan was certain that his upcoming economics test would be so easy that he could wait to study until the night before and still do well on the exam. When he cracked open his book and notes the night before the exam, he realized he should've started
studying earlier. According to behavioral economics, Dan's error was caused primarily by: A. a planning fallacy. B. an overconfidence effect. C. framing effects. D. hindsight bias.
Refer to the above table. What are total variable costs at an output of 2 units?
A. $100 B. $200 C. $150 D. $50