The colluding oligopoly will face market demand and produce up until the point at which
A. marginal revenue and marginal cost are equal and price will be set above marginal cost.
B. marginal revenue and marginal cost are equal and price will be set below marginal cost.
C. price and marginal revenue are equal and price will be set below marginal cost.
D. price and marginal cost are equal and price will be set equal to marginal cost.
Answer: A
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The multiplier helps explain
A) why a decrease in taxes causes real Gross Domestic Product (GDP) to fall by more than the amount of the decrease in taxes. B) why an increase in disposable income causes real Gross Domestic Product (GDP) to rise by less than the amount of the increase in disposable income. C) why a rise in government expenditures causes real Gross Domestic Product (GDP) to rise by more than the amount of the increase in government spending. D) why a fall in investment cause real Gross Domestic Product (GDP) to rise by more than the amount of the decrease in investment.
Value added is equal to the value of a firm's production minus
A) all of its costs of production. B) labor costs. C) investment expenditures. D) intermediate goods used in production.
A policymaker in favor of stabilizing the economy would be likely to believe
a. recessions are a waste of resources. b. economies must suffer through the booms and busts of the business cycle. c. the long policy lags make implementing policy changes in response to recession too risky. d. policy increases the magnitude of economic fluctuations.
The key reason hurricanes affect gasoline prices is
A. oil companies have an excuse to raise prices. B. a significant portion of U.S. refining capacity is located along the Gulf of Mexico. C. demand for gasoline spikes as people drive to safety. D. all U.S. gasoline is produced from oil coming out of the Gulf of Mexico.