Why is oligopoly more difficult to model than competition or monopoly?
What will be an ideal response?
Oligopolistic firms make interdependent decisions based on what they think other firms will do. Many models of oligopoly exist depending on the choice of interdependence. Also, there is little guidance on which model is most precise for a particular situation.
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According to economic analysis, the optimal level of pollution is
A) always zero. B) at the point at which the marginal benefits of pollution control exceed the marginal cost. C) at the point at which the marginal benefits of pollution control are less than the marginal cost. D) at the point at which the marginal benefits from pollution control are equal to the marginal cost.
The constant or intercept term in a statistical demand study represents the quantity demanded when all independent variables are equal to:
a. 1.0 b. their minimum values c. their average values d. 0.0 e. none of the above
If the economy in the graph shown is currently at point D, we can conclude the:
A. economy is in an economic boom.
B. government may want to enact contractionary fiscal policy.
C. unemployment rate is likely very low.
D. All of these are likely to be true.
If the government removes a binding price floor from a market, then the price received by sellers will
a. decrease, and the quantity exchanged in the market will decrease. b. decrease, and the quantity exchanged in the market will increase. c. increase, and the quantity exchanged in the market will decrease. d. increase, and the quantity exchanged in the market will increase.