Which of the following correctly describes the relationship between private-sector spending and the federal budget?
a. A decline in private-sector spending reduces the demand for government services, that reduces fiscal outlays and contributes to a budget surplus.
b. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a budget deficit.
c. A decline in private-sector spending triggers automatic stabilizers that result in a federal budget deficit.
d. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a balanced budget.
c
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If price discrimination occurs in a market
A) consumers whose demand for the product sold is more elastic pay higher prices than consumers whose demand is less elastic. B) the firm earns arbitrage profits. C) the marginal cost of production is constant. D) the law of one price does not hold.
The monopolistic competition market structure is characterized by a few large firms which account for a large percentage of industry sales
a. True b. False Indicate whether the statement is true or false
The fundamental cause of monopolies is barriers to entry
a. True b. False Indicate whether the statement is true or false
Refer to Figure 25.1 for an oligopoly firm. Assume that the existing price and quantity are $10 and 2,000 units. Which of the following statements is most likely correct?
A. Demand curves D1 and D2 both assume that rivals will not match any price changes. B. Demand curve D1 assumes that rivals match any price changes. C. Demand curves D1 and D2 both assume that rivals match any price changes. D. Demand curve D2 assumes that rivals match any price changes.