Firms that face capacity constraints can only increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC
b. Should price to capacity as long as MR = MC
c. Should price to capacity as long as MR < MC
d. Should not take capacity into consideration in pricing decisions
a
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If the Federal Reserve targets the interest rate and the money demand curve shifts to the left, then the Fed
A) can maintain the interest rate target, but at a higher quantity of the money supply. B) cannot maintain the interest rate target. C) can maintain the interest rate target with no change in the money supply. D) can maintain the interest rate target, but at a lower quantity of the money supply.
The main problem with securitization is that
A) governments are no longer able to repackage bank assets. B) securitized banks grow too large and create oligopolies. C) There is no problem. Governments can still get an accurate picture of global financial flows by simply examining bank balance sheets. D) governments are not able to monitor bank assets or to asses a bank's risk to the soundness of the international banking system. E) the bank assets are not marketable.
Which of the following is NOT a reason why some industries are oligopolies?
A) economies of scale B) barriers to entry C) strategic independence D) mergers
Cooperation:
B. is sustained by the promise of punishment for good behavior. C. can be established even if threats/promises are not credible. D. All of these are true about cooperation.