The fewer the number of firms present in a market, the:
A. more likely market power will exist.
B. less like a monopoly it will behave.
C. less likely barriers to entry are present.
D. more competition is likely to be present.
Answer: A
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Looking at the annual inflation rates in the United States from 2000 to 2013, we see that they
A) were above 10 percent throughout the period. B) were at or below 5 percent throughout the period and was negative for a year. C) started low, but increased to over 9 percent by the end of the period. D) started out above 10 percent but fell to 5 percent by the end of the period. E) were negative for most of the years during this period.
"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January?it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?
A. believing that what's good for one person is good for the whole group (the fallacy of composition) B. failing to take into account the benefits of crime (the payoff fallacy) C. believing that association is the same as causation D. failing to understand the difference between positive and normative economics.
The primary inducement for new firms to enter an industry is:
A. increased technology. B. presence of economic profits. C. low capital costs. D. availability of labor.
The profitability of the second mover in a Stackelberg model is
A) guaranteed to be negative. B) smaller than that of the first mover. C) greater than that of the first mover. D) greater than the Cournot profits.