Cutthroat competition is
A. illegal in the U.S.
B. a common form of oligopoly in the U.S.
C. used only as a last resort by large firms.
D. prevalent only in the automobile industry.
B. a common form of oligopoly in the U.S.
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The owners of sports franchises often complain that free-agency (open bidding for player services) threatens their profitability and thus their long-run viability. Given your knowledge of perfect competition, which of the following is correct?
A) Team owners might be correct in as much as free-agency bids up the price of players so that economic profits from those players equal zero. B) Team owners might be correct in as much as free-agency bids up the price of players so that economic profits from those players is negative. C) Team owners are lying, as free-agent salaries are still much too low. D) Team owners are telling the truth, as free-agent salaries are much too high.
If inflation turns out to be higher than was anticipated, debtors are helped because
A) the real present value of their payments increases. B) the real present value of their payments decreases. C) the nominal present value of their payments increases. D) the nominal present value of their payments decreases.
Which of the following is not a potential problem associated with government debt?
a. redistribution of income b. promotes underconsumption c. creates inflation d. promotes undersaving e. leads to less private investment
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.