Which of the following is not an assumption of the Cournot model presented in the text?
A. Both firms maximize profits.
B. If the first firm cuts price, the second firm will follow and if the first raises price, the second will not follow.
C. There are two firms in an industry.
D. Each firm takes the output of the other firm as given.
Answer: B
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Bill owns "Bill's Home of Blues" a store that specializes in selling CDs and DVDs of blues musicians of the 1960s and 1970s. Bill took out a loan from his bank to pay for his store and its initial inventory
Bill pays the bank $900 per week for his loan. The $900 bank payment A) is a short-run implicit cost. B) is a fixed cost. C) is a variable cost. D) is a long-run implicit cost.
Refer to the demand and supply equations. At a price of $5, there will be ________
Fill in the blank(s) with correct word
What is the underlying assumption of the original, simplified Keynesian model?
A) The relevant range of the short-run aggregate supply curve (SRAS) is vertical. B) The relevant range of the aggregate supply curve (AS) is vertical. C) The relevant range of the short-run aggregate supply curve (SRAS) is horizontal. D) The relevant range of the long-run aggregate supply curve (LRAS) is horizontal.
Which of the following transactions adds to U.S. GDP for 2015?
a. In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000.
b. An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time.
c. When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month.
d. None of the above transactions adds to U.S. GDP for 2015.