According to the search model developed by Stigler, when there are search costs, sellers know that consumers are becoming acquainted with product prices and consequently set the same price. In contrast, if there are no search costs, different prices can persist over time
Indicate whether the statement is true or false
false
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When the price level declines
A) the interest rate falls, and consumers borrow more funds, which causes a movement down along the aggregate demand curve. B) interest rates fall, and consumers borrow more funds, which causes the aggregate demand curve to shift to the left. C) the interest rate rises, and consumers borrow fewer funds, which causes a movement up the aggregate demand curve. D) the interest rate is not affected, so there is no movement along the aggregate demand curve.
Price discrimination often permits some consumers who otherwise would be excluded from a market to buy a good or service
a. True b. False Indicate whether the statement is true or false
Aniella believes that the demand for unskilled labor is relatively inelastic. Carmella believes that the demand for unskilled labor is relatively elastic. Which is an advocate of minimum-wage laws?
Consider the following innovation game: Firm A must decide whether or not to introduce a new product. Firm B must decide whether or not to clone firm A's product. If firm A introduces and B clones, then firm A earns $2 and B earns $15. If A introduces and B does not clone, then A earns $8 and B earns $1. If firm A does not introduce, both firms earn profits of 0. Which of the following is true?
A. The subgame perfect Nash equilibrium profits are ($2, 15). B. It is not in A's interest to introduce. C. The subgame perfect Nash equilibrium profits are ($8, 1). D. None of the answers is correct.