In an oligopoly in which the firms have entered into a cartel agreement, the Nash equilibrium exhibits which of the following?
A) firms jointly maximizing profits
B) the firms cheating on the cartel agreement, which benefits society
C) production at a price and output level close to monopolistic competition in the long run
D) the firms cheating on the cartel agreement, which harms society
E) one firm cheating on the cartel agreement and the other firms complying with the cartel agreement.
B
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If a straight-line demand curve slopes down, price elasticity will:
a. always be greater than one. b. always equal one. c. remain the same at all points on the demand curve. d. change between points along the demand curve.
Economists who propose a constant-money-growth-rate rule often argue that setting the annual growth rate in the money supply equal to the average annual growth rate in Real GDP
A) maintains price level stability over time. B) is a way to raise Real GDP. C) will cause the price level to fall over time. D) a and b E) a, b and c
Refer to the graph shown. To maximize profit, this firm should produce:
A. 250 units of output. B. 525 units of output. C. 450 units of output. D. 120 units of output.
A fixed exchange rate is an exchange rate whose value:
A. reflects the comparative advantage of the home country versus other foreign countries. B. is established annually by the International Monetary Fund. C. varies according to supply and demand for the currency in the foreign exchange market. D. is set by official government policy.