If both firms plan to be in business for 5 years, then the Nash Equilibrium will be
a. For each firm charge a LP every year
b. For neither firm to charge a LP in early years, but to charge a HP in later years.
c. For each firm to charge a HP every year
d. For neither firm to charge a HP in early years, but to charge a LP in later years.
a
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According to the textbook, government price controls fail because:
A. legislation cannot alter basic economic incentives. B. firms ignore the price controls. C. they are not enforced by government. D. bureaucrats lack accurate market data.
Answer the following statement(s) true (T) or false (F)
1. For a given quantity, a monopoly's marginal revenue is always greater than the price associated with that quantity. 2. When regulating a natural monopoly one should set the regulatory price such that the monopoly will produce the efficient level of output. 3. Deadweight loss because of a monopoly can be attributed to the fact that monopolies produce at a quantity where the price of the good exceeds the marginal cost of producing the last unit. 4. When there are significant differences among customers, a monopolist will look for opportunities to price discriminate. 5. Distributing goods equally among consumers would be not only fair but efficient.
Foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market are called:
A. fixed-exchange-rate deposits. B. purchasing-power-parity funds. C. international reserves. D. balance-of-payment currency.
________ in the domestic interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to depreciate, everything else held constant
A) An increase; right B) An increase; left C) A decrease; right D) A decrease; left