The analysis of oligopolistic behavior is difficult because
A. there are few real-world examples of oligopolies for economists to study.
B. oligopolists make decisions independently of each other.
C. firms in oligopolistic industries react to each other’s behavior in many ways.
D. economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory.
Answer: C
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An increase in the real interest rate will
A) most likely lower the reward to savings. B) most likely lower the cost of borrowing. C) most likely lower consumers' purchases of durable goods. D) cause consumers to spend more and save less.
________ are profits that accrue to whomever has the right to import the quota restricted good
A) Quota licenses B) Quota rents C) Quota prices D) None of the above.
In Figure 3-5 above, saving is positive at
A) point J. B) point K. C) point L. D) all of the above.
Which of the following statements regarding a competitive firm is correct?
a. Because demand is downward sloping, if a firm increases its level of output, the firm will have to charge a lower price to sell the additional output. b. If a firm raises its price, the firm may be able to increase its total revenue even though it will sell fewer units. c. By lowering its price below the market price, the firm will benefit from selling more units at the lower price than it could have sold by charging the market price. d. For all firms, average revenue equals the price of the good.