Suppose there is news that indicates that gasoline supplies might suddenly become disrupted by a truckers' union strike
What would you expect would happen to the demand for gasoline in the present? How might consumers change their behavior and why? What impact would this news have on the price of gasoline immediately? Would it matter whether the news story was accurate?
The expectations of a gasoline supply disruption might get consumers to keep their tanks full at all times. This "tank topping" behavior would artificially increase the demand for gasoline and would cause a price hike very shortly. It would not matter whether the news story was accurate but rather whether people thought it was credible.
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In a two-period model, holding everything else constant, an increase in current taxes
A) unambiguously increases the current account surplus. B) unambiguously decreases the current account surplus. C) has an uncertain effect on the current account surplus. D) has no effect on the current account surplus, as long as Ricardian equivalence holds.
Ice cream can be frozen. In the short run the magnitude of the own price elasticity of demand for ice cream:
A) is higher than in the long run. B) is lower than in the short run. C) is the same as in the long run. D) does not depend on the fact that ice cream can be frozen.
Data concerning the four-firm concentration ratios for U.S. manufacturing industries indicate that
a. very few oligopolies exist in the real world but the oligopoly model is still useful because it tells us something about firm behavior b. oligopolies are the second most prevalent market structure, monopoly being the first c. the four leading firms usually have less than 10 percent of industry sales d. the ratios are considerably less than the ratios in Canada and Western Europe e. oligopolies are very common
Strategic behavior and game theory are features of which market structure?
A) perfect competition B) monopoly C) monopolistic competition D) oligopoly