As competitors enter a monopolistically competitive industry, the incumbent firms demand curves shift
a. To the left and become less elastic
b. To the right and becomes less elastic
c. To the left and becomes more elastic
d. To the right and becomes more elastic
Ans: c. To the left and becomes more elastic
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Contractual savings institutions include
A) mutual savings banks. B) money market mutual funds. C) commercial banks. D) life insurance companies.
Suppose that a drug for treating cancer is cleared by the Food and Drug Administration and that the company is successful in obtaining a patent for its product. Which of the following is then TRUE?
A) The patent holder now faces barriers to entry. B) The method of producing the product would not be considered intellectual property. C) The patent holder has a monopoly. D) The drug would have many close substitutes.
Long-term solutions to communitywide poverty must involve:
A. increasing the value of the currency. B. ways to expand the range opportunities available to the population. C. ways to reduce taxes collected by local governments. D. All of these are true.
Lee and Cody are playing a game in which Lee has the first move at A in the decision tree shown below. Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch.
Suppose Cody tells Lee that if Lee chooses aggression, then Cody will also choose aggression, and if Lee chooses cooperation, then Cody will also choose cooperation. Cody's statement is:
A. not credible. B. credible. C. a commitment device. D. a description of the two equilibria in this game.