If an upstream firm and a downstream firm want to establish a contract, all of the following costs can be incurred except which one?
A) search costs
B) negotiation costs
C) enforcement costs
D) monitoring costs
A) search costs
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The relationships between elasticity and total revenue hold because
A. total revenue equals price divided by quantity demanded. B. total revenue equals price times quantity demanded. C. a drop in price has two opposing effects on the two components of the formula. D. both b and c are true.
When a prisoners' dilemma game is repeated a finite number of times (T)
A) cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium. B) cooperation continues until the T-2 round, where the players will switch to a non-cooperative Nash equilibrium. C) firms cooperate and achieve the collusive Nash equilibrium for all rounds. D) None of the above.
In what ways is government involved with the creation of barriers to entry?
What will be an ideal response?
Assume Company X deposits $100,000 in cash in commercial Bank A. If no excess reserves exist at the time this deposit is made and the reserve ratio is 20 percent, Bank A can increase the money supply by a maximum of:
A. $50,000. B. $180,000. C. $80,000. D. $500,000.