One firm previously operated as a monopoly. Now, one potential entrant exists. Consumers would prefer
A) entry, and the firms to split the output equally.
B) no entry, and for the incumbent to produce the Stackelberg leader level of output.
C) entry, and for the incumbent to produce the Stackelberg leader level of output.
D) no entry, and the monopoly to continue.
C
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Tour companies and cruise lines often offer last minute fares that are far below the prices paid by customers who have booked their trips far in advance. Use marginal analysis to explain this pricing tactic.
What will be an ideal response?
Improved training of employees would:
a) Shift aggregate supply outwards at each price b) Shift aggregate supply inwards at each price c) Shift aggregate demand outwards at each price d) Shift aggregate demand inwards at each price
In an article regarding Bangladesh's economy, the author suggests that the government give tax breaks on investment dollars, research and development, and donations to educational institutions. Suppose the multiplier in Bangladesh is 2. As a result of enacting the proposed policies, which of the following describe possible outcomes in the short run?
I. A $20 billion increase in investment will increase aggregate expenditure by $40 billion II. the AE curve will shift upward III. there will be and unplanned increase in inventories a) I, II, & III b) I & II only c) I & III only d) II & III only
If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is:
A. bowed out from the origin. B. bowed in toward the origin. C. a straight line. D. a vertical line.