A business with market power may
A. create new markets due to competitive forces.
B. sometimes use high profits to research new technologies.
C. be less innovative than businesses in perfect competition.
D. force employees to work harder and longer.
Answer: B
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The lower the real wage rate, the
A) fewer workers firms can profitably hire. B) more workers firms can profitably hire. C) more workers will supply labor. D) higher the nominal wage rate. E) larger the quantity of labor supplied.
The United States, as it began its long and successful growth in the early 19th century, consciously promoted domestic production through such activities as tariffs, Clay's American System, and many direct subsidies to railroads, canal companies,
farmers (free land) etc. Today we view this blatant example of large scale and extensive import-substitution industrialization as having been very successful. Comment on this.
When the bandwagon effect exists, a change in price is likely to
A) change total revenue less than if there were no network externalities. B) change total revenue more than if there were no network externalities. C) change total revenue the same amount as if there were no network externalities. D) not change total revenue at all.
Which of the following is a difference between an active approach to close a recessionary gap and a passive approach to close a recessionary gap?
a. The level of real GDP would be higher in the long run with the active approach, while it will be lower with the passive approach. b. The level of real GDP would be lower in the long run with the active approach, while it will be higher with the passive approach. c. The price level would be higher and the level of real GDP would be lower in the long run with the active approach, whereas the price level would be lower and real GDP level would be higher with the passive approach. d. Only the price level would be lower in the long run with the active approach, whereas it would be higher with the passive approach. e. Only the price level would be higher in the long run with the active approach, whereas it would be lower with the passive approach.