Answer the following statement true (T) or false (F)
1) Homogeneous oligopolists tend to advertise more than do differentiated oligopolists.
2) Oligopolists use limit pricing to maximize short-run profits.
3) Both collusive and noncollusive oligopoly models suggest that price changes will be relatively
infrequent in these types of industries.
4) Collusion among firms always involves formal agreements.
5) Firms are more likely to collude when the economy is in a recession.
1) F
2) F
3) T
4) F
5) F
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Redding Railroad is held liable by the courts for damages to crops growing along its lines caused by sparks flying off when trains pass. The court ordered damage assessment is $100 per adjoining acre though profits per acre are less than this. Currently, about half of the line has adjoining planted farmlands, the other half is not yet developed. As a result
a. farmers are likely to reduce the number of acres they plant. b. farmers are likely to increase the number of acres they plant in order to collect the payment. c. the railroad will increase the number of trains running. d. farmers will accept payments from the railroad equal to lost profits not to plant.
Increases in net investment generally result in
A) higher levels of capital stock and lower levels of depreciation. B) lower levels of capital stock and higher levels of depreciation. C) lower levels of capital stock and lower levels of depreciation. D) higher levels of capital stock and higher levels of depreciation.
The law of diminishing returns is a result of the fact that more and more units of a variable input are being added to a fixed input
Because of the limitations imposed by the fixed input, at some point the productivity of additional units of the variable input must decline. Indicate whether the statement is true or false
Which country has the highest unemployment rate?
a. Spain b. Ireland c. Sweden d. France e. All have low unemployment