25) Lectures in microeconomics can be delivered either by an instructor (labor)

Question

25) Lectures in microeconomics can be delivered either by an instructor (labor) or a movie (capital) or 25) any combination of both. Each minute of the instructor's time delivers the same amount of information as a minute of the movie. Which graph in the above figure best represents the isoquants for lectures in microeconomics when capital per day is on the vertical axis and labor per day is on the horizontal axis? A) Graph A B) Graph E C) Graph C D) Graph D 26) A dominant strategy 26) A) maximizes the joint profit of the players in the game. B) cannot exist when there is a Nash equilibrium. C) is the player's best response to all possible strategies of the other player D) only exists when the game is limited to two players 27) If adverse selection exists in a market 27) A) it increases consumer surplus but reduces producer surplus. B) it reduces producer surplus but has no impact on consumer surplus C) it reduces consumer and producer surplus. D) it increases both consumer and producer surplus. 28 28) Many companies monitor their employees' Internet use and email. Why might they be doing this? A) to gain inside information on new consumer trends B) to reduce shirking C) in order to improve morale D) because they like to spy 29) Monitoring is often used by firms in an attempt to decrease B) signaling. D) piece rates A) shirking C) adverse selection. B-5

Explanation / Answer

Answer.)

Q25.) C.) Graph C

If inputs are perfect substitutes to one another it means isoquants would be straight lines.

Q26.) B.) is the players best response to all possible strategies of the other player

A dominant strategy is one that will have the absolute best effects, no matter what your opponents or partners do. It is a set of choices that creates the highest balance of reward/risk ratios.

Q27.) C.) It reduces consumer and producer surplus

Because adverse selection increases costs and reduces sales, there’s also a potential loss of economic profits (producer surplus) by the plan.

Q28.) B.) to reduce shirking

Q29.) A.) Shirking

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