Without price competition, there is no incentive for product differentiation.
Answer the following statement true (T) or false (F)
True
Rationale: Product differentiation arises directly from price competition because strategic product differentiation allows the oligopoly firms to soften the price competition they face and retain some market power.
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Moral hazard is
A) the tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party. B) when one of the parties to an agreement has an incentive after the agreement is made to act in a manner that brings additional benefits to himself or herself at the expense of the other party. C) a situation in which only bad quality items are bought and sold. D) an action taken outside a market that conveys information that can be used by that market.
List four types of tax-deferred saving vehicles. How could tax-deferred saving vehicles, if modified, transform the U.S. income tax into a consumption tax?
What will be an ideal response?
Alan Garcia
A) in his first Presidency in Peru, followed free market economic policies. B) nationalized the property of the financial services sector during his first Presidency. C) was never freely elected in Peru and ruled with the support of the military. D) maintained balanced budgets and helped Peru avoid the economic problems most Latin American nations were experiencing in the 1980s.
Suppose the intersection of the IS and LM curves is to the right of the FE line. What would most likely eliminate a disequilibrium among the asset, labor, and goods markets?
A. A fall in the price level, shifting the IS curve down and to the left B. A fall in the price level, shifting the LM curve down and to the right C. A rise in the price level, shifting the LM curve up and to the left D. A rise in the price level, shifting the IS curve up and to the right