University of The Incarnate Word

The fixed-cost fallacy occurs when The fixed-cost fallacy occurs when a firm only considers sunk costs in making decisions. a firm ignores relevant costs. a firm only considers overhead or depreciation costs in making decisions. a firm considers both sunk costs and overhead/depreciation costs in making decisions.

Jim has estimated the elasticity of demand for gasoline to be -0.7 in the short run and -1.8 in the long run. A decrease in taxes on gasoline would: Jim has estimated the elasticity of demand for gasoline to be -0.7 in the short run and -1.8 in the long run. A decrease in taxes on gasoline would: lower tax revenue in both the short and long run. raise tax revenue in both the short and long run. raise tax revenue in the short run but lower tax revenue in the long run. lower tax revenue in the short run but raise tax revenue in the long run.

If a firm anticipates that it is at a risk of being held up, it is more likely to If a firm anticipates that it is at a risk of being held up, it is more likely to insist on the transaction. not merge with its trading partner. offer better terms to its potential trading partner. forego the transaction completely, merge with its trading partner, or demand better terms from its potential trading partner.

Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market, what is the equilibrium price in this market?

A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. What is the equilibrium price in the market without the market maker?

If the quantity sold of two-liter Coke bottles increases by 10% when price falls by 2%, what is the total change in revenue?