Oligopolists are more sensitive to the pricing and output policies of their rivals when
a. all firms produce identical products
b. their products are highly differentiated
c. there is freedom of entry and exit
d. there are barriers to entry
e. there are many firms in the industry
A
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If nominal interest rates have a lower bound of zero and deflation occurs at 3% (i.e., the inflation rate equals -3%, then the lowest real interest rate possible is
A) -3%. B) 0%. C) 3%. D) 6%.
From the 1960s to the early 1990s, marginal tax rates _____
a. varied, but not in a consistent direction b. steadily declined c. steadily increased d. remained relatively constant
If this firm were a perfect competitor, it would produce at _____ units of output and charging a price of _______.
A. 200; $7.00.
B. 200; $12.80.
C. 280; $10.40.
D. 280; $12.00.
Economists have noted that businesses of a certain type tend to congregate geographically, attracting workers with skills in those fields. This, in turn, lures more firms seeking employees with those skills. Some examples include commercial banking,
software development, and the automobile industry. What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees. What will be an ideal response?