What entices a second firm to enter a market that was previously a single price monopoly?
What will be an ideal response?
A firm will enter a market when the incumbent monopolist is earning positive profits in the short run and in the long run. This occurs when the price that the firm charges is higher than the ATC at the profit-maximizing quantity.
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The four factors of production (or types of resources) are
A. labor, capital, technology, and entrepreneurial ability. B. land, labor, capital, and entrepreneurial ability. C. labor, capital, entrepreneurial ability, and money. D. land, labor, capital, and money.
Financing government spending by selling bonds to the public, which pays for the bonds with currency,
A) leads to a permanent decline in the monetary base. B) leads to a permanent increase in the monetary base. C) leads to a temporary increase in the monetary base. D) has no net effect on the monetary base.
Today, __________ state banks are members of the Federal Reserve System
A) all B) most C) a minority of D) none of the
Most state governments in the United States operate under constitutional provisions that severely restrict expenditures financed by borrowing
Suppose this were to change, so that state governments' access to credit markets was no different from the federal government. What consequences would you predict for the nation's aggregate debt burden?