Which of the following statements is always true with respect to oligopolists?
a. They react slowly to actions taken by other firms
b. They lower prices together
c. They raise prices together
d. They know with certainty what they other firms will do
e. They take into consideration how other firms might react.
e
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A firm's supply curve is that portion of its average cost curve that lies above their marginal cost curve
a. True b. False
Pete throws leftover bread onto his front lawn because he enjoys watching the pigeons feeding. His neighbor John is not happy about the pigeons, since they leave a mess on his property. This is an example of a nice gesture causing a
a. negative externality b. public good c. positive externaility d. third-party benefit e. free-rider outcome
Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
A. and industry output will be less than the initial price and output. B. will be greater than the initial price, but the new industry output will be less than the original output. C. will be less than the initial price, but the new industry output will be greater than the original output. D. and industry output will be greater than the initial price and output.
Which of the following would be classified as fiscal policy?
A) The federal government passes tax cuts to encourage firms to reduce air pollution. B) The Federal Reserve cuts interest rates to stimulate the economy. C) A state government cuts taxes to help the economy of the state. D) The federal government cuts taxes to stimulate the economy. E) States increase taxes to fund education.