Which of the following results in a Prisoner's Dilemma?

Select one:

a. A reduction in labor costs results in higher short term profits for a firm.

b. Increasing the number of managers actually reduces the productivity of non-management personnel.

c. Federal regulations designed to increase product safety actually increase cost of production.

d. A firm's profit maximizing action results in the destruction of the entire industry.

A monopolistically competitive firm:

Select one:

a. tries to differentiate its product from its competitors' products.

b. faces a perfectly elastic demand curve for its product.

c. has more monopoly power in the long run than does a perfectly competitive firm.

d. earns an economic profit in the long run.

For a perfectly competitive firm, marginal revenue equals average revenue because the

Select one:

a. firm's supply curve is horizontal

b. industry's demand curve is horizontal

c. firm's demand curve is horizontal

d. industry's supply curve is horizontal

e. is positive and rising for most goods.

When quantity demanded exceeds quantity supplied

Select one:

a. there exists a surplus of a good

b. the price tends to fall.

c. the price is below the equilibrium price.

d. there is no excess demand.

An isoquant defines the combination of inputs that yield the producer

Select one:

a. higher levels of output than the desired level of output.

b. lower levels of output than the desired level of output.

c. the same level of output.

d. none of the statements associated with this question are correct.

Assume the market for aloe hand lotion is in equilibrium. A government report finds aloe hand lotion causes skin to fall off. Consumer preference for aloe hand lotion falls dramatically, but the price of aloe hand lotion remains unchanged. What will result?

Select one:

a. A shortage of aloe hand lotion as the quantity demanded will be greater than the quantity demanded.

b. A surplus of aloe hand lotion as the supply will be greater than demand.

c. A surplus of aloe hand lotion as the quantity supplied will be greater than the quantity demanded.

d. A shortage of aloe hand lotion as the quantity supplied will be greater than the quantity demanded.