5 Written questions
5 Matching questions
- The process by which new firms and new products replace existing dominant firms and products is called:
- Alex was willing to pay $50 for the new World Cup soccer ball. When he received it as a gift, he was willing to sell it, but for no less than $80. According to behavioral economists:
- If for a firm P = minimum ATC = MC, then:
- The primary force encouraging the entry of new firms into a purely competitive industry is:
- (Last Word) Oil wells and seasonal resorts will often shut down temporarily because:
- a creative destruction.
- b Alex's behavior is consistent with the endowment effect.
- c both allocative efficiency and productive efficiency are being achieved.
- d prices for their output temporarily fall below their average variable costs of production.
- e economic profits earned by firms already in the industry.
5 Multiple choice questions
- people isolate purchases and sometimes make irrational decisions.
- demand is elastic at high prices.
- the price elasticity of demand is 2.25.
- a change in price will have no effect on the quantity supplied.
5 True/False questions
Which type of goods is most adversely affected by recessions? → Goods for which the income elasticity coefficient is relatively high and positive.
If the demand for farm products is price inelastic, a good harvest will cause farm revenues to: → decrease
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: → and industry output will be less than the initial price and output.
Anchoring → can influence decision-making with irrelevant information.
The demand for autos is likely to be: → to firms in all types of industries.