most microeconomic models assume that decision makers wish to
what links the decisions of consumers and firms in a market?
economic models are most often tested
which of the statements below is/are normative?
if the price of automobiles were to increase substantially, the demand curve for gasoline would most likely
the expression "increase in quantity supplied" is illustrated graphically as a
a market equilibrium occurs
if oranges were found to cure cancer,
the change in price that results from a leftward shift of the supply curve will be greater if
suppose the demand function for a good is expressed as q = 100 - 4p. if the good currently sells for $10, then the price elasticity of demand equals
the price elasticity of supply when the supply curve is q = 5 is
in the late 1980s, the health benefits of oat bran were widely advertised. if the price of oats increased 50%, causing the quantity of oats supplied to increase by 40%, then the price elasticity of supply was
if two bundles are on the same indifference curve, then
joe's income is $500, the price of food (f) is $2 per unit, and the price of shelter (s) is $100. which of the following represents his budget constraint?
the assumption of completeness means that
utility is the set of numerical values that
joe's budget constraint equals 500 = 2f 100s, where $500 is joe's income, $2 is the price of food (f) and $100 is the price of shelter (s). how much food can joe buy if he buys one unit of shelter?
if both prices decreases by 50%,
the marginal rate of transformation of y for x represents
if fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2, then
the fact that your fourth slice of pizza does not generate as much satisfaction as your third slice is an example of
the consumer is in equilibrium when
sandy derives utility from consuming "all other goods," g, and clean air (measured by particulate matter removed per m3), a, as measured by the utility function u(g,a) = g0.6a0.4. the price of "all other goods" is $20 and the price of clean air (abatement) equals $10. brian is the only other consumer in the market for clean air and demands 10 units of clean air. what is the market demand for clean air?
an inidual's demand curve for a good can be derived by measuring the quantities selected as
when the price of a good changes, the substitution effect can be found by comparing the equilibrium quantities purchased
one reason more sport utility vehicles (suvs) are driven in the united states than in europe is
a movement upward along an upward sloping engel curve corresponds to
data shows that united states college students purchase more e-books than german college students. assuming that all students have identical preferences for e-books and textbooks, what is the likely explanation for this result?
by selecting a bundle where mrs = mrt, the consumer is saying
both sally and sam receive a 10% raise in a single year. sally increases her demand for ground beef whereas sam decreases his demand for ground beef.
when the price of a good changes, the income effect can be found by comparing the equilibrium quantities purchased
robinson crusoe is stranded on an island. he finds that coconuts are freely available (zero harvest cost), but fish are difficult to harvest and require a lot of energy. as a result, harvesting fish has a high price. if coconuts and fish are imperfect substitutes, what is robinson crusoe likely to consume?
if mrs > mrt, then the consumer is better off than at equilibrium.
an increase in income (all else equal) will always lead to a parallel shift of the budget line.
efficient production occurs if a firm
firms maximize profit when
with respect to production, the short run is best defined as a time period
in the long run, all factors of production are
the marginal product of labor is
joey cuts lawns during the summer. let q equal the number of acres mowed per day, and let l equal the number of hours worked per day. joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ∗ l. which of the following statements is false?
the slope of the total product curve always equals
to say that isoquants are convex is to say that
the slope of an isoquant tells us
returns to scale refers to the change in output when
returns to scale is a concept that operates
let the production function be q = alakb. the function exhibits constant returns to scale if
the length of the short run is the same for all firms.
cobb-douglas production functions can never possess varying returns to scale.
which of the following statements is not true?
suppose the total cost of producing t-shirts can be represented as tc = 50 2q. the marginal cost of the 5th t-shirt is
if average cost is decreasing,
variable costs are
suppose the short-run production function is q = 10 ∗ l. if the wage rate is $10 per unit of labor, then mc equals
the slope of the isocost line tells the firm how much
if the cost of labor increases, the isocost line will
suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. in the long run, the firm's cost function is
if the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital in dollars?
suppose mpl = 0.5 ∗ (q/l) and mpk = 0.5 ∗ (q/k). in the long run, the firm will hire equal amounts of capital and labor
economic costs of an input include
the production possibilities frontier
if sam is producing at a point on his production possibilities frontier, then he
opportunity cost of an action is
choose the correct statements. 1. opportunity cost of a good is the increase in the quantity produced of one good ided by the decrease in the quantity produced of another good as we move along the ppf. 2. the opportunity cost of an action is the highest-valued alternative forgone. 3. opportunity cost is a ratio. 4. there is no relationship between the opportunity cost of producing an additional good measured on the x-axis and the opportunity cost of producing an additional good measured on the y-axis.
production efficiency is achieved when
the "law of diminishing marginal returns" could also be termed the "law of increasing marginal costs."
if increasing returns to scale are present, the long-run average cost increases as more output is produced.
"if the wage rate paid to one form of labor is twice the cost of another form of labor, the first type of labor must be twice as productive." comment.
if the inverse demand function for toasters is p = 60 - q, what is the consumer surplus if price is 30?
if a competitive firm maximizes short-run profits by producing some quantity of output, which of the following must be true at that level of output?
firms maximize profit when
why a long-run market supply curve might not flat in perfect competition
in the following actions taken by government, which might cause a loss in social welfare
in the long-run equilibrium in perfect competition, producer surplus is positive.
in perfect competion, the marginal cost curve always cross the lowest point on average variable cost curve
a per unit subsidy increases both consumer and producer surplus, but results in a deadweight loss.
a firm’s producer surplus equals to its profit if it has no fixed cost
the deadweight loss generated by a perfect-price-discriminating monopoly
if the demand curve a monopolist faces is perfectly elastic, then the ratio of the firm's price to the marginal cost is
suppose a monopolistically competitive industry evolved into a perfectly competitive industry. which of the following statements is correct
in the long run, a monopolistic compe
the more block prices a monopoly can set instead of setting a single price,
a monopoly always operates in the inelastic portion of its demand curve
perfect competition and monopolistic competition are similar in that both market structures include no barriers to entry.
as the quantity produced of a good increases, the social welfare generated by that good increases
on following normal-form game l c r t 2,0 1,1 4,2 m 3,4 1,2 2,3 b 1,3 0,2 3,0 what is the reduced game after iterated elimination of strictly dominated strategies.
on following normal-form game l c r t 2,0 1,1 4,2 m 3,4 1,2 2,3 b 1,3 0,2 3,0 what's nash equilibrium of this game?
on interesting feature of a prisoner’s dilemma game is that
on following three-player game, where player 1 chooses rows, player 2 columns and player 3 matrices l r l r t 2,1,0 3,0,1 t 3,0,1 1,0,0 m 3,2,2 4,3,5 m 5,0,2 2,2,7 b 1,4,1 2,4,3 b 0,1,2 0,2,3 l r which strategy of player 1 is strictly dominated?
on following three-player game, where player 1 chooses rows, player 2 columns and player 3 matrices l r l r t 2,1,0 3,0,1 t 3,0,1 1,0,0 m 3,2,2 4,3,5 m 5,0,2 2,2,7 b 1,4,1 2,4,3 b 0,1,2 0,2,3 l r what’s nash equilibrium of this game?
(first-price sealed-bid auction) alice is selling her 2000 chevrolet cavalier to her friends, bob and charles. bob attaches a value of s$8,000 to alice's old car, while charles's value of the car is s$10,000. (these valuations are common knowledge between bob and charles.) alice designs the following auction to sell her car: first, she asks each of them to write his bid on a piece of paper. then bob and charles give their bids (nonnegative integers) to alice. notice that when bob and charles write down their bids, they don't know each other's bid (so called "sealed bid"). after alice receives the sealed bids, the bids are shown to everyone, and the car will be sold to the person who has the higher bid at the price equal to his own bid. when there is a tie (bob and charles bid the same amount), then alice would flip a fair coin to decide who will get the car. decide true or false：in this game, bob has 8000 strategies and charles has 10000 strategies.
(first-price sealed-bid auction) alice is selling her 2000 chevrolet cavalier to her friends, bob and charles. bob attaches a value of s$8,000 to alice's old car, while charles's value of the car is s$10,000. (these valuations are common knowledge between bob and charles.) alice designs the following auction to sell her car: first, she asks each of them to write his bid on a piece of paper. then bob and charles give their bids (nonnegative integers) to alice. notice that when bob and charles write down their bids, they don't know each other's bid (so called "sealed bid"). after alice receives the sealed bids, the bids are shown to everyone, and the car will be sold to the person who has the higher bid at the price equal to his own bid. when there is a tie (bob and charles bid the same amount), then alice would flip a fair coin to decide who will get the car. decide true or false：in this game bob bids 8000 and charles bids 8000 is a nash equilibrium
(first-price sealed-bid auction) alice is selling her 2000 chevrolet cavalier to her friends, bob and charles. bob attaches a value of s$8,000 to alice's old car, while charles's value of the car is s$10,000. (these valuations are common knowledge between bob and charles.) alice designs the following auction to sell her car: first, she asks each of them to write his bid on a piece of paper. then bob and charles give their bids (nonnegative integers) to alice. notice that when bob and charles write down their bids, they don't know each other's bid (so called "sealed bid"). after alice receives the sealed bids, the bids are shown to everyone, and the car will be sold to the person who has the higher bid at the price equal to his own bid. when there is a tie (bob and charles bid the same amount), then alice would flip a fair coin to decide who will get the car. decide true or false：in this game bob bids 7999 and charles bids 8000 is a nash equilibrium
(first-price sealed-bid auction) alice is selling her 2000 chevrolet cavalier to her friends, bob and charles. bob attaches a value of s$8,000 to alice's old car, while charles's value of the car is s$10,000. (these valuations are common knowledge between bob and charles.) alice designs the following auction to sell her car: first, she asks each of them to write his bid on a piece of paper. then bob and charles give their bids (nonnegative integers) to alice. notice that when bob and charles write down their bids, they don't know each other's bid (so called "sealed bid"). after alice receives the sealed bids, the bids are shown to everyone, and the car will be sold to the person who has the higher bid at the price equal to his own bid. when there is a tie (bob and charles bid the same amount), then alice would flip a fair coin to decide who will get the car. decide true or false：in this game bob bids 8500 and charles bids 8400 is a nash equilibrium
player 1 chooses a or b; player 2 chooses x or y. x y x y a 2,2 4,0 a 0,0 0,0 b 0,4 3,3 b 0,0 1,1 game 1 game 2 player 1 knows which game is played; player 2 knows only that each game is played with equal probability what are players’ strategies?
player 1 chooses a or b; player 2 chooses x or y. x y x y a 2,2 4,0 a 0,0 0,0 b 0,4 3,3 b 0,0 1,1 game 1 game 2 player 1 knows which game is played; player 2 knows only that each game is played with equal probability what is the reduced game after iterated elimination of strictly dominated strategies of each type?
player 1 chooses a or b; player 2 chooses x or y. x y x y a 2,2 4,0 a 0,0 0,0 b 0,4 3,3 b 0,0 1,1 game 1 game 2 player 1 knows which game is played; player 2 knows only that each game is played with equal probability what’s bayesian nash equilibrium of this game?
consider an inidual whose utility is given by , where x denotes his wealth. a lottery gives him 64rmb with probability 0.5 and 144rmb with probability 0.5. what is the risk premium for him?
consider an inidual whose utility is given by , where x denotes his wealth. a lottery gives him 64rmb with probability 0.5 and 144rmb with probability 0.5. what is the risk premium for him?
the increase in total revenue due to increasing the amount of labor employed by one unit is called the
if a competitive firm faces a competitive labor market, it will hire labor until
if a firm buys its labor in a competitive market, then a short-run increase in the price of the firm's output will cause the firm to
in a perfectly competitive resource market the marginal revenue product curve is
in a perfectly competitive resource market the labor supply curve facing the single firm is
for a monopsonist, the labor supply curve is upward sloping because
universities are able to act as monopsonists in the market for professors because
the labor supply curve for a monopsony is
if a firm takes the wage as given, then the supply curve of labor to that firm is
the steeper the labor supply curve,
under monopsony, the wage rate
if the competitive firm maximizes profit by selecting labor rather than output, it will earn greater economic profit.
because of market power, wages are higher under monopsony than under competitive conditions.