The Nash equilibrium in a Bertrand game of price setting where all firms have different marginal cost is:
a. efficient because all mutually beneficial transactions will occur.
b. efficient because of the free entry assumption.
c. inefficient because some mutually beneficial transactions will be foregone.
d. inefficient because of the uncertainties inherent in the game.
c
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Which of the following statements about a monopolistically competitive firm, in the short run, is true?
a. Profits will be maximized at the point at which price equals marginal cost and hence there is no deadweight loss. b. The firms earn zero economic profit in the short run. c. The firms achieve allocative and productive efficiency in the short run. d. Advertising may enable a firm to charge a higher price than that charged by rival firms. e. It faces a perfectly elastic demand curve.
Education and training are ways to build:
A. human capital. B. physical capital. C. technological capital. D. All of these could be true.
The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions
a. These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. b. These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. c. These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. d. These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.
An example of a Pigovian tax would be a tax on:
A. corporate capital gains. B. cigarettes. C. income. D. All of these are examples.