With increasing returns (falling average costs), as the remaining firms expand, their demand curves become _______________ due to foreign competition, and firms must _______________.
a. steeper; raise prices
b. flatter; lower prices
c. flatter; raise prices
d. steeper; lower prices
Ans: b. flatter; lower prices
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In a competitive market equilibrium
A) marginal benefit and marginal cost are maximized. B) the marginal benefit equals the marginal cost of the last unit sold. C) total consumer surplus equals total producer surplus. D) consumers and producers benefit equally.
If the money multiplier is 10, the sale of $1 billion of securities by the Fed on the open market causes a
A) $10 billion decrease in the money supply. B) $1 billion decrease in the money supply. C) $1 billion increase in the money supply. D) $10 billion increase in the money supply.
During the early 1930s, the Fed was reluctant to rescue nonsolvent banks out of fear of encouraging:
A) moral hazard B) adverse selection C) bank run D) sovereign debt crisis
The break-up of slave families was most often due to:
a. the sale of fathers. b. the sale of mothers. c. the sale of children. d. divorce.