Which of the following would indicate a relatively large amount of market power?
A. Low cross-price elasticity with other products
B. Highly price elasticity demand
C. Low Lerner index
D. all of the above
E. none of the above
Answer: A
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Suppose a contractionary monetary policy raises nominal interest rates. If this is the case, it follows that the contractionary monetary policy must have:
A. reduced expected inflation. B. increased real interest rates more than it reduced expected inflation. C. increased expected inflation. D. increased expected inflation more than it reduced real interest rates.
The income-expenditure identity for a closed economy is:
A. Y + G = C + I ? NX. B. Y = C + I + G. C. Y = C + I + G + NX. D. Im ? Ex = C + I.
Which of the following would shift the short-run aggregate supply curve to the right?
A. A reduction in the minimum wage B. An increase in oil prices C. A change in the law requiring overtime pay for anyone working more than 30 hours a week D. An increase in payroll taxes
If the CPI declines from one year to the next, then the following statements are true, except:
A. There is deflation B. The inflation rate is negative C. The average price level is decreasing D. The CPI turns negative in the next year