5 Written questions
5 Matching questions
- A supply curve that is a vertical straight line indicates that:
- Josh will receive a salary of $300,000 next year. According to prospect theory:
- The primary force encouraging the entry of new firms into a purely competitive industry is:
- The fact that most medical care purchases are financed through insurance:
- The MR = MC rule applies:
- a Josh will only be happy with that salary if his cost of living has not increased.
- b economic profits earned by firms already in the industry.
- c to firms in all types of industries.
- d a change in price will have no effect on the quantity supplied.
- e increases the amount of health care consumed by reducing the price of additional units of care.
5 Multiple choice questions
- buyer responsiveness to price changes.
- Alex's behavior is consistent with the endowment effect.
- the price elasticity of demand is 2.25.
- change from being monopolistic to being competitive.
5 True/False questions
Under what conditions would an increase in demand lead to a lower long-run equilibrium price? → and industry output will be less than the initial price and output.
What do the income effect, the substitution effect, and diminishing marginal utility have in common? → They all help explain the downsloping demand curve.
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: → The firms in the market are part of a decreasing-cost industry.
The demand for a necessity whose cost is a small portion of one's total income is: → relatively price inelastic.
Anchoring → can influence decision-making with irrelevant information.