Recurring fixed costs may lead to only one firm producing in a Cournot oligopoly model.
Answer the following statement true (T) or false (F)
True
Rationale: As fixed costs increase, the best-response functions drop to zero earlier -- eventually no longer crossing at the interior where both firms produce. (See end-of-chapter exercise 24.2.)
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Consider the following scenario. Initially the economy has 90 million people working, 10 million people unemployed, and 20 million people not in the labor force. Then prospects for the economy improve
Five million people who previously were not in the labor force now join the 10 million previously unemployed in looking for work. For now, the economy remains with 90 million workers. What happens to the unemployment rate?
Under free trade, a large country produces one million leather bags per year and imports another two million bags per year at the world price of $60 per bag. Assume the country imposes a specific tariff of $5 per bag. As a result, the per-unit price of leather bags decreases to $58 in the international market and the import of leather bags drops to 1.6 million. The domestic production, on the other hand, increases to 1.1 million. Following the imposition of the tariff, the domestic consumers pay a price of ________ for each bag.
A. $65 B. $63 C. $60 D. $58
A windfall profit tax imposed on oil companies would shift the firms'
A) marginal tax rate. B) marginal cost curve. C) average cost curve. D) production function.
With microfinance, the mechanism of peer lending is a way to avoid the problem of
A. a double coincidence of wants. B. the tragedy of the commons. C. imperfect information. D. capital flight.