Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and equally share the economic profit. If firm A increases output,
A) both firms' profits increase.
B) firm A's profits increase and firm B's profits decrease.
C) firm B's profits increase and firm A's profits decrease.
D) both firms' profits decrease.
E) firm A's profits increase and firm B's profits do not change.
B
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If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,
A) the buyer pays all the tax. B) the seller pays all the tax. C) the buyer pays 3/4 of the tax. D) the seller pays 3/4 of the tax. E) the buyer pays 4/3 of the tax.
One reason the Federal Reserve Board in Washington did not act as a lender of last resort during the early years of the Great Depression, was its power struggle with ____
a. U.S. Treasury b. foreign central banks c. Federal Reserve Bank of New York d. President Roosevelt
Unlike nonrenewable resources, the timing of extraction of renewable resources are independent of the market rate of interest
a. True b. False Indicate whether the statement is true or false
If a country was operating well below its long-run capacity (potential GDP), the initial impact of an unanticipated increase in the money supply would most likely result in an increase in
a. prices with little change in output. b. output with little change in prices. c. output and a decline in prices. d. prices and a decline in output.