Sears and Wal-Mart must decide whether to lower their prices, based on the economic profits shown in the table above. Which of the following is TRUE?
A) This situation is not a prisoners' dilemma.
B) If Sears lowers its prices and Wal-Mart does not, Sears will make a $20 million economic profit.
C) If Wal-Mart lowers its prices, Sears should keep its prices high.
D) Both Sears and Wal-Mart would jointly be better off if they could each keep their prices high.
D
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The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the welfare loss will equal
A) j. B) f + g. C) b + c + f + g. D) c + g.
If you were the Chairman of the Fed and faced a recession, you would most likely
a. increase commercial bank reserves by raising the discount rate b. increase commercial bank reserves by buying government securities c. decrease commercial bank reserves by raising the discount rate d. decrease commercial bank reserves by selling government securities e. decrease commercial bank reserves by lowering the legal reserve requirement
GDP can be found by:
A.) Adding the monetary value of all final goods and services produced during a given period of time. B.) Adding the physical amount of all final goods and services produced during a given period of time. C.) Taking the difference between exports and imports during a given period of time. D.) Adding the value of all final output produced and measuring it in constant prices during a given period of time.
Refer to Figure 1.7. If this economy is currently producing at point F, then by employing more resources this economy
A. Can move to point D, but not points G or J. B. Can move to point G, but not points D or J. C. Can move to points D, G, or J. D. Will remain at point F.