Examples of strategic behavior include
A) kinked demand and linear demand.
B) prisoner's dilemma and interdependence.
C) kinked demand and economic profit
D) prisoner's dilemma and kinked demand.
D
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Legal limits on prices will tend to cause misallocation of resources because
A. the market price does not reflect the costs of production. B. people are unable to determine their preferences at the high or low price. C. producers are able to produce less efficiently. D. consumers no longer have incentive to spend their income efficiently. E. All of these responses are correct.
Price elasticity of supply is defined as
A) the quantity supplied divided by the quantity demanded. B) the change in the quantity supplied divided by the change in the quantity demanded. C) the percentage change in the quantity supplied divided by the percentage change in price. D) the percentage change in the quantity supplied divided by the percentage change in the quantity demanded.
Demand curves often do not remain stationary; they shift because of changes in other variables.
Answer the following statement true (T) or false (F)
On a graph of production costs, the vertical distance between the fixed cost curve and the total cost curve at a specific quantity represents
a. variable cost b. average variable cost c. average total cost d. average fixed cost e. marginal cost