The Bertrand model of oligopoly reveals that:
A. capacity constraints are not important in determining market performance.
B. changes in marginal cost do not affect prices.
C. perfectly competitive prices can arise in markets with only a few firms.
D. All of the statements associated with this question are true.
Answer: C
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How does a real wage above the equilibrium wage cause unemployment?
What will be an ideal response?
Which of the following is incorrect regarding financial intermediaries? a. They link savers and borrowers
b. They earn profits by loaning money. c. They offer lower interest rates on savings than they charge on loans. d. They print money. e. They accept deposits.
Speculation serves the market in which of the following ways?
a. It helps smooth out price fluctuations. b. It raises the price of certain goods. c. It manufactures a demand for goods that would not ordinarily be found. d. It allows risk takers the ability to make large amounts of economic rent.
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. The expected value of the payoff is ________ for the first game and ________ for the second game.
A. $4.50; $5.75 B. $5.00; $4.50 C. $5.75; $5.25 D. $5.75; $4.50