In a situation where both firms in a two-firm, balanced oligopoly choose to avoid the worst case scenario
a. both firms will end up in the worst case
b. both firms end up in a Nash equilibrium outcome
c. only one firm will survive
d. both firms end up charging different prices
e. both firms end up with different profit margins
B
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Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
A) housing prices to fall during that period. B) mal-investment, that is, excessive investment in housing construction during 2002-2005. C) a subsequent increase in interest rates that led to a housing boom. D) a reduction in housing construction during 2002-2005.
Refer to the diagram. Which of the following would shift the investment demand curve from ID 1 to ID 2
A. A lower interest rate.
B. Lower expected rates of return on investment.
C. A higher interest rate.
D. Higher expected rates of return on investment.
When federal outlays exceed revenues, the budget is said to be in surplus
Indicate whether the statement is true or false
The figure below shows the supply and demand curves for jeans in Smallville.
The equilibrium price will NOT lead to the largest possible total economic surplus if:
A. the market for jeans is perfectly competitive. B. the production of jeans generates air pollution. C. there are diminishing returns in the production of jeans. D. jeans are purchased by consumers with reservation prices greater than $40.