Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1 + q2, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is , at the Nash-Stackelberg equilibrium firm 2's profit is
A) 400.
B) 650.
C) 800.
D) 1200.
C
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In a perfectly competitive market, a firm's short-run supply curve is
A) its total cost curve. B) its marginal cost curve equal to or above the point of intersection with its average variable cost curve. C) its average variable cost curve below the point of intersection with its total cost curve. D) its total cost curve between the shutdown point and the break-even point.
Which of the following correctly describes fractional reserve banking?
a. The federal government only insures a fraction of the deposits at most banks. b. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio. c. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults. d. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
Long-run economic growth (meaning the economy's average annual rate of growth over an extended period is greater than zero) is depicted by a(n)
a. horizontal trend line b. downward-sloping trend line c. fluctuating trend line (which fluctuates around the average) d. upward-sloping trend line e. vertical trend line