Suppose there are no barriers to entry in the market for facial tissues, where two brands dominate the industry. According to the theory of contestable markets, the price charged for facial tissues will be:
A. roughly equal to the cost of producing a box of facial tissue.
B. far above the cost of producing a box of facial tissue.
C. far below the cost of producing a box of facial tissue.
D. much higher for the number-one-selling brand than it is for the number-two-selling brand.
Answer: A
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Policies to encourage higher personal saving rates include ________
A) lowering income taxes B) lowering sales taxes C) increasing the quantity of money D) raising asset prices E) reducing interest rates
The decrease in the value of the dollar relative to the Mexican peso
A. increased the dollar price paid and decreased the peso price received for Mexican goods imported into the U.S. B. decreased both the dollar price paid and the peso price received for Mexican goods imported into the U.S. C. increased both the dollar price paid and the peso price received for Mexican goods imported into the U.S. D. decreased the dollar price paid and increased the peso price received for Mexican goods imported into the U.S.
One reason why economists often appear to disagree when asked about the impact of some bad economic news is that
a. they do not understand the economy very well b. economics is a very difficult science, and so there are many incorrect economic projections being made c. economists rarely disagree; people just think they are disagreeing because they do not understand the language of economics d. economists often appear to be disagreeing when one is talking about long-run impact while the other is referring to short-run impacts e. economists are by nature competitive individuals and they often disagree
Exhibit 11-12 A monopsonist
In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:
A. the MRP curve slopes down. B. the market supply of labor curve is horizontal. C. the MFC curve lies above the supply of labor curve. D. the MRP curve lies below the supply of labor curve.