5 Written Questions
5 Matching Questions
- (Last Word) When patents on new medications expire, the market for those drugs:
- The primary force encouraging the entry of new firms into a purely competitive industry is:
- The ability of a good or service to satisfy wants is called:
- Under what conditions would an increase in demand lead to a lower long-run equilibrium price?
- Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
- a change from being monopolistic to being competitive.
- b and industry output will be less than the initial price and output.
- c economic profits earned by firms already in the industry.
- d The firms in the market are part of a decreasing-cost industry.
- e utility.
5 Multiple Choice Questions
- straight, upsloping line.
- the price elasticity of demand is 2.25.
- people isolate purchases and sometimes make irrational decisions.
- diminishing marginal utility.
- P = MC.
5 True/False Questions
Anchoring → can influence decision-making with irrelevant information.
The price elasticity of demand coefficient measures: → demand is elastic at high prices.
Josh will receive a salary of $300,000 next year. According to prospect theory: → Josh will only be happy with that salary if his cost of living has not increased.
The MR = MC rule applies: → to firms in all types of industries.
If the demand for farm products is price inelastic, a good harvest will cause farm revenues to: → less price elastic than the demand for Honda Accords.