Answer the following statement(s) true (T) or false (F)
1. When a monopoly supplier acquires a monopoly manufacturer, the vertical merger intensifies the supplier's use of monopoly power over the manufacturer.
2. A buy-out is more likely to delay a rival's reemergence than is predatory pricing.
3. Economic analysis suggests that resale price maintenance is primarily used by manufacturers to keep prices artificially high.
4. A firm has the incentive to cheat on a cartel agreement only when it fears that other cartel members will also cheat.
5. The Prisoners' Dilemma game is another situation where the Invisible Hand Theorem is true.
1. False
2. True
3. False
4. False
5. False
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Sources of economic growth include
a. additional amounts of more highly skilled and educated labor. b. additional amounts of capital. c. new technology. d. All of these.
An increase in the price of butter is likely to cause the demand for:
A. olive oil to increase. B. olive oilto decrease. C. butter to increase. D. butter to d.
Average variable cost is
a. total cost minus fixed cost b. total variable cost divided by the quantity of output c. total cost plus marginal cost d. total cost per unit of output e. output divided by the quantity of inputs used
Suppose the economy is initially experiencing a recessionary gap. An increase in the size of the budget deficit will
A. increase the size of the recessionary gap. B. lead to an increase in prices with no increase in real GDP. C. lead to a decrease in prices with an increase in real GDP. D. reduce the size of the recessionary gap.