In the circular flow model with the government sector, transfers
A) flow only through the goods market.
B) flow in the same direction as do taxes.
C) flow in the opposite direction as do taxes.
D) to firms flow in the same direction as do rent, wages, interest, and profits.
E) to households flow in the same direction as do expenditures on goods and services.
C
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The long-run aggregate supply line is:
A. downward sloping. B. upward sloping. C. vertical at the economy's actual output. D. vertical at the economy's potential output.
Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with constant marginal and average costs of $10
a. Determine the Cournot equilibrium quantities and price b. What would be the collusive (joint-profit maximizing) price and quantity? c. Derive the deadweight loss from (i) Cournot Dupoly, (ii) Collusion, and (iii) Perfect competition in this market with the two firms.
Perfect competition forms one extreme of the market structure spectrum
a. True b. False Indicate whether the statement is true or false
If an increase in quantity demanded of a product reduces the quantity demanded of another, then the two goods are said to be substitutes
a. True b. False Indicate whether the statement is true or false