The interdependence among oligopoly firms arises because:
a. the products those firms produce are homogeneous
b. the products those firms produce are heterogeneous.
c. entry barriers are low.
d. a small number of firms produce a large share of industry output.
d
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In the market for reserves, a lower interest rate paid on excess reserves
A) decreases the supply of reserves. B) increases the supply of reserves. C) decreases the effective floor for the federal funds rate. D) increases the effective floor for the federal funds rate.
When economists refer to the role of money as a standard of deferred payment, they mean that
A) payments by checks are usually deferred until the checks clear the bank. B) money earns interest while loan payments are deferred. C) money provides a standard for payments that will occur in the future. D) money today is worth less than money tomorrow.
If a firm chooses to produce output at the point where MR equals MC,
a. then TR - TC will be maximized if there is a profit b. economic profits will be zero c. there will be positive accounting profits d. there will be positive economic profits e. average cost must equal average revenue
Explain the following statement: "Good decisions typically require marginal analysis, which weighs added costs against added benefits."