Economic theory implies that a mature industry without any significant technological change will tend to have firms with similar architectural structures, similar reward structures, and similar performance systems. Would the power of the marketplace be important in this case?
What will be an ideal response?
The correlation between market structure and organizational architectures is not spurious. If markets are relatively noncompetitive, then centralized decision making may be more the norm, since speed of response to changing market conditions is not as important. Similarly, centralized control is important in highly regulated marketplaces. In very competitive environments, or in situations where firms compete in different market segments with different characteristics, decentralization is usually the best solution. Local decision makers are more likely to have the appropriate knowledge and can act quickly in their submarkets.
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If a market produces a level of output below the competitive equilibrium, then
A) social welfare is not maximized. B) consumer surplus might still be maximized. C) the actual price will be below the equilibrium price. D) social welfare might still be enhanced if a price ceiling keeps price below the competitive price.
The incentive to lend increases as the real rate of interest decreases
a. True b. False Indicate whether the statement is true or false
If the reserve ratio is 15 percent, and banks do not hold excess reserves, and people hold only deposits and no currency, then when the Fed sells $25.5 million worth of bonds to the public, bank reserves
a. increase by $25.5 million and the money supply eventually increases by $382.5 million. b. increase by $25.5 million and the money supply eventually increases by $170 million. c. decrease by $25.5 million and the money supply eventually decreases by $382.5 million. d. decrease by $25.5 million and the money supply eventually decreases by $170 million.
The household survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll
Indicate whether the statement is true or false