Suppose the market for good X has a four-firm concentration ratio of 0.50. Furthermore, assume that total sales in the industry are $1.2 million. Based on this information, we know that sales for the largest four firms in the industry equal (in aggregate):
A. $2,400,000.
B. $240,000.
C. $600,000.
D. $60,000.
Answer: C
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The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year. B) remain at 6 percent a year. C) rise to 8 percent a year. D) change, but more information is needed to determine by how much. E) None of the above answers is correct.
If a country imposes a tariff on an imported good, the tariff ________ the price in the importing country and ________ the quantity of imports
A) raises; decreases B) raises; increases C) raises; does not change D) lowers; does not change
Which of the following is likely to occur when a two-person game can be played repeatedly?
a. Collusion and cooperation among the players b. The prisoner's dilemma c. The industry demand curve will become perfectly elastic d. The industry demand curve will become perfectly inelastic e. There is no solution possible because of the indeterminate price quantity combinations
The law of marginal diminishing returns
A) is found everywhere. B) is found only in manufacturing. C) is found only in developed economies. D) is the same as the law of diminishing marginal utility.