Which of the following is an assumption of the Cournot model?
A. Each firm takes the output of the other firm as given.
B. There is only one firm in an industry.
C. The firms behave so as to maximize their revenues.
D. Firms collude to fix prices and quantities.
Answer: A
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A currency system in which exchange rates are determined in free markets is called a
A) gold standard. B) flexible exchange rate system. C) fixed exchange rate system. D) all of the above
An increase in the quantity demanded is shown as
A) a movement along the demand curve. B) a movement toward the demand curve. C) a rightward shift of the demand curve. D) a leftward shift of the demand curve. E) both a movement along the demand curve and a shift of the demand curve.
As the housing bubble collapsed, the combination of increasing interest rates and pessimism about future economic prospects:
A. increased both consumption and investment spending. B. decreased consumption and increased investment spending. C. decreased both consumption and investment spending. D. increased consumption and decreased investment spending.
Suppose Peru decides to increase its production of emeralds by 2. What is the opportunity cost of this decision?
a. 30 rubies b. 40 rubies c. 60 rubies d. 120 rubies