This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the figure, we can predict the outcome will be that:
A. there is more than one stable outcome to this game.
B. MiiTunes charges high prices and The Rock Shop does not enter.
C. there is no stable outcome to this game.
D. None of these statements is true.
Answer: D
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The expenditure approach values ________ and the income approach values ________
A) goods and services at market prices; goods and services at factor prices B) services only at factor prices; goods only at market prices C) only goods at market prices; only services at factor prices D) goods and services at market prices; services at factor prices E) goods and services at factor prices; goods and services at market prices
In the above figure, what is the minimum supply price for the fourth gallon of ice cream?
A) $2.00 B) $3.00 C) $4.00 D) $5.00
Sam spends all of his income on textbooks and hot dogs. The price of a textbook is $40 and the price of a hot dog is $0.50
If Sam is maximizing his utility and the marginal utility he derives from the last textbook he purchases is 400, then the marginal utility he derives from his last hot dog purchased must be A) 400. B) 10. C) 5. D) 20.
Marginal revenue for an oligopolist is
A) identical to the demand for the firm's product. B) difficult to determine because the firm's demand curve is typically unknown. C) horizontal on a price-quantity diagram. D) downward sloping beneath the firm's demand curve.