In the Boeing/Airbus oligopoly example discussed in the text, why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?
What will be an ideal response?
Both Boeing and Airbus wanted to produce more planes than the monopoly outcome because each realized that if it and it alone produced an additional plane, its profit increased. Of course, the profit of its competitor would decrease, but that does not matter to the calculations made by Boeing and Airbus.
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In the circular flow of income
A) households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms. B) households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms. C) households sell goods and services while firms sell factors. D) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.
Unexpected discoveries of mineral reserves will ordinarily cause the price of these minerals to increase
a. True b. False Indicate whether the statement is true or false
Explain why insurance companies may find themselves at times having to refuse business.
What will be an ideal response?
Which of the following would increase the unemployment rate?
A) a law making it illegal to work more than 35 hours per week B) a cut in unemployment compensation C) an increase in unemployment insurance payments D) a decrease in the minimum wage