Plowback refers to the profits management decides to keep and reinvest in the firm’s operations.
Answer the following statement true (T) or false (F)
True
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For a market with a linear demand curve and constant marginal cost of production, why are the reaction functions for the Cournot duopoly sellers also straight lines?
A) The reaction functions do not have to be straight lines, and they are only drawn this way in the book to keep the figures simple. B) Cournot thought the lines would be straight, but this was proven wrong by other economists. C) Marginal revenue is always linear when marginal costs are constant. D) We know that the marginal revenue curves for linear demand curves are also straight lines.
In a free market economy, the market clearing (equilibrium) price in the above table would adjust to
A) $1. B) $3. C) $4. D) $5.
In the antebellum period, the largest source of employment was:
a. the agricultural sector. b. the manufacturing sector. c. government (local, state and federal) d. the service industry.
The biggest difference between using a Pigovian tax or a tradable allowance to correct for a negative externality is:
A. the government collect revenues from the tax, and the private parties trade quota rights on their own. B. the tax creates an efficient outcome, and the tradable allowances do not. C. the tax maximizes total surplus, but the tradable allowances do not. D. All of these are differences between the two government policies.