A competitive firm rents capital until the marginal product of capital equals the:
A. real wage.
B. real rental price of capital.
C. price of output.
D. capital/labour ratio.
Ans: B. real rental price of capital.
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The above figure shows the payoff matrix for two firms, A and B, choosing to produce a basic computer or an advanced computer. The mixed-strategy Nash equilibrium is
A) Firm A produces an advanced computer with 80% chance, firm B produces an advanced computer with 20% chance. B) Both firms produce advanced computers with 50% chance. C) Firm A produces an advanced computer with 60% chance, firm B produces an advanced computer with 40% chance. D) Both firms produce advanced computer with 80% chance.
Refer to Figure 9.6. As a result of this policy, producer surplus will be
A) $2000. B) $3375. C) $4500. D) $6000. E) $12,000.
The amount by which the quantity demanded exceeds the quantity supplied at a given price is a
A. Balance-of-payments deficit. B. Market surplus. C. Balance-of-payments surplus. D. Market shortage.
The domestic demand and supply for sugar are Qd = 60,000 ? 400P and QSD = 20,000 + 500P. The foreign supply is QSF = 20,000 + 100P. Suppose an import quota of 13,000 is imposed in the domestic market. What will be the new market price of sugar?
A. $30 B. $15 C. $45 D. $20