If a monopoly suddenly became a perfectly competitive industry, equilibrium output would _________, and the equilibrium price would _________.
a. increase; increase
b. decrease; decrease
c. increase; decrease
d. decrease; increase
Answer: c. increase; decrease
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The World Bank has extended loans to the government of a developing country to finance construction of a canal with a certain future flow of earmings Now, however, the government has decided to redirect those funds to build a casino that may or may not generate suficient profits to allow the government to repay the loan This situation is an example of
a. Systemic Risk b. Moral Hazard c. Adverse Selection d. Asymmetric Information e. Principle Agent Problem
Time-series studies of consumption reveal that
A) the long-term saving ratio is rising. B) the long-term saving ratio is falling. C) the long-term saving ratio is constant but the marginal propensity to consume is falling. D) both the long-term marginal propensity to save and the long-term saving ratio are constant.
In the United States, paper money is redeemable for gold
a. True b. False Indicate whether the statement is true or false
Which of the following would not be counted in the U.S. BOP current account?
a. Helen, an American oil engineer, is a paid adviser to Middle Eastern countries in the area of petroleum extraction. b. General Motors Corporation owns buildings that are situated in Mexico. c. France purchases a new jet fighter aircraft from the Boeing Company in the U.S. d. Martha receives a $50 dividend check on stock she owns in a business in Germany. e. A wealthy Italian purchases numerous antiques in the United States for his villa.