Chapter 2: Demand Theory
The market demand schedule shows the quantities that would be purchased, holding all other
factors constant, from a group of firms during a given time period:
a. at varying prices.
b. at varying advertising leve
A basic distinction between the long run and the short run is that
A. in the short run, complete adjustment of all inputs is impossible, while in the long run all
inputs can be adjusted.
B. in the long run, some inputs are fixed, while in the
Marginal Revenue Product is the theoretical name for the supply of a resource such as labor.
The labor market is more likely to be operating in the backward bending portion of the labor supply curve
In a small country the population equals 15,000. 6,000 people are in the labor force and 5,000 people are
employed. The unemployment rate equals
D. an undetermined amount given the lack of information.
According to the above figure, if steel mills ignore the cost of pollution, the equilibrium quantity of steel will be
C. Q2 - Q1.
D. none of the above.
The correct answer is: Q1.
Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of
Harmony: When P = $3, Qd = 100; at P = $5, Qd = 75; and when P = $7, Qd = 50. This year the
village population has increased by 25%. What impact is this
Which of the following statements about economic models is true?
A. The predictive power of models is not important.
B. Economic models are not empirically testable.
C. Economic models are designed so that every detail of th
Whenever the price in a market is above the equilibrium price, a shortage exists in that market.
The less competitive is a market, the more relevant is the Marshallian market price adjustment.
Choose the one alternative that best completes the statement or answers the question.
1) In a two-player simultaneous game, if player A has a dominant strategy and player B does
not, player B will