The price elasticity of demand for pleasure travel (-1.9 ) and business travel (-0.8 ) suggests that air travel for pleasure is a luxury and air travel for business is a necessity
Indicate whether the statement is true or false
TRUE
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If all inputs are increased by 5 percent and output increases by 8 percent, then the
A) firm experiences constant returns to scale. B) long-run average cost curve slopes downward. C) long-run average cost curve shifts downward. D) firm experiences diseconomies of scale.
If a corporate bond with a face value of $2,000 pays yearly coupon payments of $50, what is the coupon rate?
A) 2.5% B) 4% C) 25% D) 40%
According to the matrix shown, how much will be produced if both firms collude?
This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
A. 50 million units
B. 65 million units
C. 70 million units
D. 85 million units
Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price. Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect
A. one of the firms to select a high price and the other a low price. B. one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period. C. both to select high prices. D. both to select low prices.