Suppose that at the start of this year you got a salary increase of 10 percent from your employer. The prices of the goods and services you typically purchase increase 10 percent during the year. At the end of the year you have experienced on balance:
A. Higher real income and higher nominal income.
B. Higher real income but lower nominal income.
C. No change in nominal income.
D. No change in real income.
D. No change in real income.
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Which two factors make regulating mergers complicated?
A) First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed. B) First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms. C) First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually. D) First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge.
In a price leadership oligopoly model,
a. a cartel of leading firms determines price and industry output. b. the industry in consortium with the government determines price and output. c. one firm is the price leader and all other firms follow. d. the firms abandon a profit-maximizing goal. e. firms do not operate where MR = MC.
When new firms choose to enter monopolistically competitive markets: a. there must be little diversity of products in the market
b. they are guaranteed economic profits upon entry. c. some firms in the market must be making economic profits. d. the demand curve faced by an established firm will shift to the right as a result.
Which of the following ideas is the most plausible?
a. Tax revenue is more likely to increase when a low tax rate is increased than when a high tax rate is increased. b. Tax revenue is less likely to increase when a low tax rate is increased than when a high tax rate is increased. c. Tax revenue is likely to increase by the same amount when a low tax rate is increased and when a high tax rate is increased. d. Decreasing a tax rate can never increase tax revenue.