Professional gamblers know that the odds are always in favor of the house (casinos). The fact that they gamble says they are:
A. risk-neutral.
B. risk-averse.
C. risk seekers.
D. irrational.
Answer: C
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In a situation of mutual interdependence and identical products, managers of oligopolistic firms ________ a response to their rivals' actions and ________ compete on price.
A) do not have; should B) have; should C) do not have; should not D) have; should not
The following is not associated with bid-rigging
a. bid-riggers bidding their true value b. "knockout" auctions c. bid rotations d. amnesty to the first conspirator willing to testify against fellow conspirators
Consider the following scenario: The Kellogg's facility buys corn and makes boxes of cornflakes. The grocer buys those boxes and places them on the shelf. A mother then buys a box for her family. Which of the following would be classified as a purchase of a final good?
What will be an ideal response?
A local government is considering a 10 percent tax on items A, B, and C. They want to tax only those goods for which the burden of the tax is lowest on suppliers. They know that the elasticity of supply of all the suppliers in question is about equal and have observed that when the price of A, B, and C rose 10 percent, total sales receipts for A and B rose 2 percent but declined 2 percent for C. From this information, they should:
A. tax A and B but not C. B. tax A, B, and C equally. C. tax C but not A and B. D. You need to know the volume of sales to determine the answer.