Territorial division among firms in an industry would lead to price and output behavior similar to
A. monopolistic competitors.
B. a regional monopoly.
C. cutthroat competitors in an oligopolistic market.
D. perfect competitors.
B. a regional monopoly.
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Economists make assumptions because
A. this is a way of incorporating value judgments into their models. B. their use allows complex situations to be analyzed. C. this permits imperfect information to describe reality. D. assumptions are the final product of careful economic analysis. E. assumptions allow economists to avoid facts that contradict their theories.
The IS curve has a
A. negative slope because a higher interest rate leads to a decrease in government spending which reduces the domestic output level. B. positive slope because a higher interest rate leads to an increase in aggregate savings and thus an increase in domestic real investment. C. negative slope because a higher interest rate leads to a decrease in aggregate demand that results in lowering of the domestic production level. D. positive slope because a higher interest rate leads to an increase in foreign investment and thus raises the level of aggregate income.
The quantity theory of money implies that the price level will be stable (no inflation or deflation) when the growth rate of the money supply equals
A) 0. B) the growth rate of the price level. C) the growth rate of the velocity of money. D) the growth rate of real GDP.
Suppose a plaintiff hires a lawyer to represent her in a court case. To which of the following contracts would a highly risk-averse plaintiff agree?
A) The lawyer is paid by the hour. B) The lawyer receives a share of the settlement. C) The lawyer receives a fixed fee. D) The lawyer pays the client a fee for the right to the entire settlement.