If a company is the sole U.S. producer of good X, the market may still be contestable because of all but which one of the following?
A. New technology may threaten to make good X obsolete.
B. Many domestic firms can potentially begin production of good X.
C. The presence of a government franchise.
D. Foreign producers can provide good X to the U.S. market.
Answer: C
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The use of psychological incentives to solve commitment problems would be least effective in games played:
A. once between family members. B. repeatedly between strangers. C. once between strangers. D. repeatedly between family members.
Which of the following could increase unemployment and inflation simultaneously?
A) a decrease in the real wage B) an increase in oil prices C) expansionary monetary policy D) contractionary monetary policy
As the economy recovers from a recession, we should expect that demand for:
a. inferior goods will fall and demand for non-inferior goods will rise. b. all goods will rise. c. inferior goods will rise and demand for non-inferior goods will fall. d. all goods will fall. e. complements will fall.
Answer the following questions true (T) or false (F)
1. The elasticity of supply is equal to the percent change in price for a given percent change in quantity. 2. The market supply curve under conditions of perfect competition is typically perfectly elastic. 3. An increase in supply will increase the quantity demanded.