The price that a person must pay in order acquire purchasing power now rather than in the future is called
a. the interest rate.
b. the foreign exchange rate.
c. the inflationary premium.
d. the risk premium.
A
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If Real GDP is greater than Natural Real GDP, the economy is in a(n)
A) frictional gap. B) structural gap. C) recessionary gap. D) inflationary gap.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. If Fun Cable Company were to be awarded the exclusive right to provide cable service in Stratospheria,
what price would it charge per household per month? A. $5.00 B. $27.50 C. $30.00 D. $55.00
Perfect competition is the term used to describe
a. an industry in which all businessmen are honest and accommodating. b. an industry in which numerous firms produce identical products. c. an industry untouched by government regulation. d. the kind of industry any American would support.
Two firms compete as a Stackelberg duopoly. The demand they face is P = 40 ? Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:
A. ?L = $81; ?F = ?$40.5. B. ?L = $162; ?F = $40.5. C. ?L = $162; ?F = $81. D. ?L = $81; ?F = $40.5.