List appropriate criteria for deciding whether a merger of two firms producing similar products should be permitted.
What will be an ideal response?
Mergers that take place between two firms producing similar products reduce competition insofar as one firm disappears. However, if there are economies of scale, one large firm will have lower costs than two smaller firms. (Other possible advantages are learning from each other and risk reduction.) Economies of scale favor horizontal mergers, while the reduction in the number of firms gives pause to allowing a merger.
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If the marginal propensity to consume is 0.75, the marginal propensity to save is
A) 0.25. B) 0.5. C) 1. D) 3.
The horizontal portion of the short-run aggregate supply curve reflects the Keynesian assumption of "sticky" prices
Indicate whether the statement is true or false
A Lorenz curve measures the ________ on the vertical axis
A) cumulative percentage of money income B) cumulative percentage of family wealth C) cumulative percentage of families D) demand of families on welfare
Suppose that the demand curve for apples is downward sloping and the price per pound decreases from $1.25 to $1.00. We would then expect
A. the demand for apples to decrease. B. the demand curve to shift toward the origin. C. the quantity of apples demanded to fall. D. the quantity of apples demanded to increase.