According to William Shepherd, in the U.S. economy
a. Herfindahl indexes have been increasing, indicating a decrease in competitiveness
b. Herfindahl indexes have been decreasing, indicating a decrease in competitiveness
c. the market share of the largest manufacturing firms has increased, indicating a decrease in competitiveness
d. competition has decreased because of exports, regulation, and insufficient antitrust activity
e. competition has increased because of more imports, deregulation, and antitrust activity
E
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Explain how two Bertrand price competitors can price above marginal cost in an infinitely repeated game setting.
What will be an ideal response?
Is it possible for the total market demand for a good at the prevailing price to be inelastic while the demand facing any one seller of the good is highly elastic?
A) No, because each seller's demand is a part of the total demand. B) No, because if this were the case the price would fall until the market demand became elastic. C) No, because if this were the case the price would rise until the market demand became elastic. D) Yes, and it's actually quite common.
Assume the economy is initially in equilibrium where potential GDP is less than real GDP
If the expected inflation rate, the term structure effect, and the default-risk premium are constant, ________ in the Fed's target short-term nominal interest rate will shift up the MP curve which will result in real GDP ________. A) an increase; falling B) an increase; rising C) a decrease; falling D) a decrease; rising
The assumption that the marginal product of labor decreases as the labor input increases implies that
A) output decreases as the labor input increases. B) the wage increases as the labor input increases. C) the production function is concave. D) the production function shifts upward.