Suppose an oligopolistic producer assumes its rivals will ignore a price increase but match a price cut. In this case the firm perceives its:
A. demand curve as being of unit elasticity throughout.
B. supply curve as kinked, being steeper below the going price than above.
C. demand curve as kinked, being steeper below the going price than above.
D. demand curve as kinked, being steeper above the going price than below.
Answer: C
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An income tax _____
a. increases the return to bearing risk, if the company is a monopolist b. has no impact on the return to bearing risk c. increases the return to bearing risk d. reduces the return to bearing risk
The term "fiscal federalism" refers to
a. deficit financing of government programs. b. the power of Congress to tax and to determine how tax revenues are spent. c. transferring money between levels of government (for example, from a state government to a local government). d. the system under which governments ask citizens to vote on major revenue-raising measures (for example, on issues of municipal bonds).
In a free market economy, current consumption, saving and investment decisions
What will be an ideal response?
All of the following are examples of automatic stabilizers except
A) personal income taxes. B) means-tested federal transfer payments. C) welfare benefits. D) government emergency spending.