The Bertrand model is a more plausible model of firm behavior than the Cournot model
A) when firms set the quantity to be sold.
B) when firms sell a differentiated product.
C) because firms that sell a non-differentiated product typically act as price takers.
D) because the Bertrand model predicts that firms will price at marginal cost.
B
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Arbitrage opportunities exist when uncovered interest rate parity does not hold
Indicate whether the statement is true or false
The most important reason for the slope of the aggregate-demand curve is that as the price level
a. increases, interest rates increase, and investment decreases. b. increases, interest rates decrease, and investment increases. c. decreases, interest rates increase, and investment increases. d. decreases, interest rates decrease, and investment decreases.
Refer to the diagram below, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S3?
A. A decrease in the cost of equipment used in corn farming
B. An increase in the price of soybeans
C. A decrease in the price of corn
D. An increase in the number of acres of farmland allocated to corn
Moral hazard can do harm to one party to a contract, but always results in efficient behavior.
Answer the following statement true (T) or false (F)