A knowledge spillover occurs when firms:
a. restrict trade of inputs with each other.
b. have wasteful expenditure.
c. mimic the successful innovations of other firms.
d. keep secrets from other firms.
Ans: c. mimic the successful innovations of other firms.
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Assume that there are no excess reserves, no savings accounts, and no currency held by the public. If the demand deposit expansion multiplier is 4, the required reserve ratio must be
A) also 4. B) .2. C) .25. D) .5.
Because of automatic stabilizers, government budget deficits are
a. positive during both expansions and contractions. b. negative during both expansions and contractions. c. zero if averaged out over the entire business cycle. d. larger during expansions and smaller during contractions. e. smaller during expansions and larger during contractions.
Incentives are an important aspect to determine whether multiple tasks should be combined into one job or not. How can monetary incentives help and/or hinder the process of getting a job done, particularly if it is made up of several tasks?
What will be an ideal response?
Refer to the diagram. If this industry is purely monopolistic, the profit-maximizing price and quantity will be:
A. P 3 and Q 3 .
B. P 1 and Q 1 .
C. P 2 and Q 2 .
D. indeterminate on the basis of the information given.