Suppose the market demand curve is P = 40 - 2Q and the constant marginal cost of production is MC = 20. Which of the following is a valid expression for the collusion curve?
A) Q = 5
B) Q1 = 5 - Q2
C) Q1 = Q2 = 5
D) Q1 = 40 - Q2
A
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The marginal propensity to save is defined as:
A) ?C/?Yd. B) ?S/?Yd. C) ?Yd/?C. D) ?Yd/?S.
Banks act as:
A. an organizer among firms in a specific market. B. intermediaries between borrowers and savers. C. informants to various buyers about prices and contracts. D. a negotiator for buyers.
What assumption(s) is (are) necessary to generate a kinked demand curve?
a. all firms in the industry ignore the price changes made by any one firm b. any price decrease will be ignored but price increases will be followed c. all firms will follow a price decrease but will ignore any price increase d. all price changes made by any firm will be followed by all of the other firms e. price can increase, but not decrease
Using Figure 9.9, and assuming the full-employment output level is $50 billion,
A. There is a recessionary gap of $50 billion income. B. The economy is at macro equilibrium. C. There is an inflationary gap of $25 billion income. D. There is an inflationary gap of $50 billion income.