Why is microeconomic theory often referred to as price theory?
What will be an ideal response?
The reason is that much of microeconomic theory focuses on the factors which influence and determine prices.
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In one week, Mohammed can knit 5 sweaters or bake 240 cookies. The opportunity cost per sweater for Mohammed is
a. $240 b. 240 cookies c. 48 sweaters d. 1/48 of a cookie e. 48 cookies
A bond with a par value of $1,000 is traded at $1,500 . The coupon rate offered on the bond is 10 percent.The bond matures after a period of 5 years . The coupon paid to the bond holder after the end of the first year is:
a. $150. b. $100. c. $200. d. $50. e. $250
Suppose there is a market in which the firms hold the following market shares: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1%. What is the concentration ratio for this market?
A command-and-control policy:
A. is unlikely to have any impact on the amount of pollution emitted. B. does not affect the production costs of firms. C. usually finds the most efficient pollution abatement technology. D. decreases the incentive for firms to develop efficient abatement technologies.