Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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A) must be high enough for firms to earn a profit. B) must coincide with the free market equilibrium price. C) must lie below the free market equilibrium price. D) must lie above the free market equilibrium price.
The U.S. antitrust enforcers will likely block a merger if
A) the merging firms already earn excessive profits. B) the merging firms are in different markets. C) the merger will substantially increase market power. D) the degree of concentration declines as a result of the merger.
The average fixed costs of a firm equal
a. implicit costs divided by output. b. explicit costs divided by output. c. total cost minus variable cost. d. (total cost minus variable cost) divided by output.
In the context of an ultimatum game, the first player proposes a split of $100 to a second player. The second player can either accept the split or both players receive $0 . A rational second player will accept any offer a. greater than $0
b. equal to $50. c. greater than $50. d. that she thinks is fair.