Suppose a new Dunkin' Donuts shop has opened in town. Its main competitor, Doughnut Delite, will likely
a. begin to produce more doughnuts.
b. experience higher marginal costs.
c. reduce its prices and production.
d. make no changes in its pricing and production decisions.
c. reduce its prices and production.
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The sum of currency and reserves of depository institutions is the ________
A) reserves of the Fed B) assets of the Fed C) monetary base D) vault cash
Suppose that the demand curve D m for medical services can be characterized by the equation M = 2000 - P, where M is the amount of medical services received per year and P is the price. Suppose further that P 0 is constant at 800.
(a) Find the equilibrium quantity of services at P 0 . (b) Find the equilibrium quantity of services when there is only a co-payment of 20% required such that the price is 0.2P 0 . (c) How much additional expenditures induced by insurance are created?
A characteristic of a public good is that a public good is provided
A) to some businesses, but not to others. B) only in some states. C) to low income residents in some states. D) to many individuals at no additional cost.
When the price level falls
A) imports increase, and exports decrease, which causes a movement up along the aggregate demand curve. B) there is no impact on imports or exports, so there is no associated movement along the aggregate demand curve. C) imports decrease and exports increase, which cause a movement down along the aggregate demand curve. D) imports decrease and exports increase, which cause a movement up along the aggregate demand curve.