If firms compete in a Cournot fashion, then each firm views the:
A. output of rivals as given.
B. profits of rivals as given.
C. prices of rivals as given.
D. All of the statements associated with this question are correct.
Answer: A
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Which of the following would be considered rent-seeking activity?
a. A software firm using lawsuits to drive competitors out of business. b. A technology firm investing in extremely expensive capital equipment. c. A large firm trying to charge lower prices than its competitors. d. An auto manufacturer using features and styling to differentiate its models from its competitors'.
If GDP is $1,000 . consumption is $750, interest payments are $200, rent payments are $400, and profits are $200, what must wages and salaries equal?
a. $800 b. $400 c. $250 d. $0 e. $200
When policymakers set prices by legal decree, they
a. are usually following the advice of mainstream economists. b. improve the organization of economic activity. c. obscure the signals that normally guide the allocation of society's resources. d. are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.
How does aggregate demand (AD) curve differ from an individual demand curve (D)?
A. D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system. B. AD is generally vertical while D is usually downward sloping. C. AD is generally a downward sloping curve while D usually slopes upward. D. Look for D in macroeconomic analyses and for AD in microeconomics.