Oligopolistic firms never collude because they have almost no incentive to do so.
Answer the following statement true (T) or false (F)
False
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The entry of new firms into a market stops when:
a. the accounting profit of existing firms falls to zero. b. the general price level in the economy rises. c. the rate of interest in the economy declines. d. the economic profit of existing firms falls to zero. e. the corporate taxes are relaxed.
Imagine an economy whose autonomous consumption is $100 billion and MPC is constant at 0.90 . Which of the following will shift the economy's consumption curve upward?
a. a tax increase b. higher capacity utilization rates c. higher national income d. lower wealth holdings e. expectations of higher inflation in the future
In a perfectly competitive market, when the price is greater than the minimum average total cost for most firms, some will:
A. exit until the price increases to equal minimum ATC. B. enter until the price increases to equal minimum ATC. C. exit until the price drops to equal minimum ATC. D. enter until the price drops to equal minimum ATC.
The equation representing the investment schedule for the economy is:
Answer the question on the basis of the following data for a private
closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment respectively.
A. I = .3Y.
B. I = 80 - .3Y.
C. I = 30 + .1Y.
D. I = I 0 = 30.