Refer to Figure 25.1 for an oligopoly firm. Assume that the existing price and quantity are $10 and 2,000 units. Which of the following statements is most likely correct?
A. Demand curves D1 and D2 both assume that rivals match any price changes.
B. Demand curve D1 assumes that rivals do not match price changes.
C. Demand curves D1 and D2 both assume that rivals will not match any price changes.
D. Demand curve D2 assumes that rivals do not match price changes.
Answer: D
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Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged. C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
A. benefits-received B. inexpensive-to-collect C. ability-to-pay D. fairness of contribution
An increase in a nation's financial liabilities to foreign residents is a
A. capital imports. B. capital outflow. C. reserve inflow. D. reserve outflow.
Net exports are positive when exports are greater than imports.
Answer the following statement true (T) or false (F)