The duopolists' dilemma refers to the situation in which:
A. duopolists would be better off maintaining high prices but face an incentive to choose a low price.
B. duopolists can only earn high profits by breaking the law.
C. duopolists who are engaged in price fixing have an incentive to report the behavior to the government.
D. duopolists do not have a dominant strategy.
Answer: A
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If Fast Prints has a contract with local couriers to deliver their products to customers located throughout the city, this is an example of ________.
A) outsourcing B) a market transaction C) forward integration D) backward integration
If a market basket of goods cost $100 in the base year and $110 in a later year, then average prices have increased by:
A. 110 percent. B. 100 percent. C. 90 percent. D. 10 percent.
Which model of oligopoly results in the greatest efficiency?
A. collusion model B. contestable markets model C. Cournot model D. price leadership model
Assume the marginal propensity to consume (MPC) is 0.75 and the government cuts taxes by $250 billion. The aggregate demand curve will shift to the:
a. right by $1,000 billion. b. right by $750 billion. c. left by $1,000 billion. d. left by $750 billion.