Monopolistic competition displays productive efficiency in the short run, while perfect competition does not display productive efficiency
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to Monopoly Supplier and Manufacturer. After the merger, the leather company will earn surplus of
The following questions refer to the accompanying diagram, which shows a monopoly leather supplier selling leather to a monopoly shoe manufacturer. The leather supplier initially produces QM and charges the shoe manufacturer PM. Then the leather supplier acquires the shoe manufacturer in a vertical merger.
a. Area A + B.
b. Area A + B + C + D + E.
c. Area F + G + H.
d. Area A + B + C + D + E + F + G + H.
Taking some types of spending "off budget" means
A) eliminating that spending. B) financing the spending by special one-time taxes. C) borrowing to finance it instead of using tax revenue. D) not counting that spending as part of the official budget.
How would a country offset the effects of reduced government spending (assume fixed exchange rates and low international capital mobility)?
a. The central bank would sell securities in the open market. b. The central bank would buy securities in the open market. c. The central bank would buy domestic currency in the foreign exchange market. d. The central bank would raise the discount rate.
The price of gold is $300 per ounce in New York and 2,550 pesos per ounce in Mexico City. If the law of one price holds for gold, the nominal exchange rate is ________ pesos per U.S. dollar.
A. 85.5 B. 8.5 C. 1.18 D. 0.118