In the market for potatoes, where price level reaches its low in October and its peak in June, speculators help to:
a. keep the equilibrium price uniform over the year.
b. lower the level of consumption in June.
c. lower the level of consumption in October.
d. keep the equilibrium price level low over the year.
A
You might also like to view...
Refer to Figure 14-7. Uniguest, Inc is a company that provides PCs with internet access and touch-sensitive screens to hotels
Suppose the Hard Rock Hotel and Casino in Las Vegas informs Uniguest that it is considering installing these systems in its hotel rooms. The Hard Rock expects to be able to charge higher prices for these rooms if it installs Uniguest's systems in its rooms. The two companies begin bargaining over what price the Hard Rock will pay Uniguest for its systems, and the decision tree shown above illustrates this bargaining game. Note that the profit figures listed in the decision tree are additional profits for the Hard Rock and total profits for Uniguest. a. Suppose the Hard Rock offers Uniguest $1,200 per system. Will Uniguest accept or reject this offer? Why? b. Suppose the Hard Rock offers Uniguest $800 per system. Will Uniguest accept or reject this offer? Why? c. Suppose Uniguest attempts to obtain a favorable outcome from the bargaining by telling the Hard Rock it will reject an $800-per-system offer. If the Hard Rock does not believe the threat is credible, what will it do? Why? What will Uniguest do? Why? d. Is there a subgame-perfect equilibrium in this situation? Explain.
Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. At the Nash-Cournot equilibrium, the total quantity, Q, is
A) 30. B) 45. C) 60. D) 90.
As the price level decreases real GDP demanded increases because
A. consumer wealth increases. B. net exports decrease. C. interest rates decrease and cause lower investment. D. net exports are indeterminant .
Cost-push inflation occurs
A. when the aggregate supply curve shifts to the left, while aggregate demand remains stable. B. when the aggregate demand curve shifts to the right, while aggregate supply remains stable. C. when the aggregate supply curve shifts to the right, while aggregate demand remains stable. D. when the aggregate demand curve shifts to the left, while aggregate supply remains stable.