To determine the optimal method of production for a good or service, a perfectly competitive firm needs to know all of the following except
A. the prices charged by its rivals.
B. the technologies of production that are available to the firm.
C. the prices of inputs.
D. the market price of output.
Answer: A
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Agreement between firms in an industry to set a certain price or to share a market is
a. a coordinating practice. b. a competitive practice. c. the substitution effect. d. a collusive practice.
A decrease in the marginal revenue product of land will: a. decrease the supply of land
b. increase the rental earnings from land. c. increase the price of land. d. decrease the demand for land.
When we compare the graph for an increase in aggregate demand with that for the Phillips curve, we can see that the Phillips curve graph is more useful if we want to focus on ______.
a. inflation and unemployment rates
b. aggregate demand and inflation
c. price levels
d. RGDP
If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. Which of the following is true?
A. A dominant strategy for firm A is to advertise. B. A Nash equilibrium is for both firms to advertise. C. A dominant strategy for firm B is to advertise. D. None of the answers is correct.