The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. What policy could government adopt to prevent entry deterrence by the incumbent?
A) production quotas
B) price ceiling
C) safety standards
D) None of the above is correct.
A
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New growth theorists conclude that
A) invention is more important than innovation in spurring economic growth. B) economic growth can continue as long as we keep coming up with new ideas. C) rates of global economic growth are limited by the amount of raw materials available. D) the amount of technological innovation in an economy is independent of the rewards offered for innovation.
When we consider solving a free rider problem through changing social norms, it is helpful to remember:
A. all costs aren't financial. B. social disapproval can be considered a cost. C. conflict with those in your community can be considered a cost. D. All of these statements are true.
If at a given real interest rate desired national saving is $200 billion, domestic investment is $100 billion, and net capital outflow is $80 billion, then at that real interest rate in the loanable funds market there is a
a. surplus. The real interest rate will rise. b. surplus. The real interest rate will fall. c. shortage. The real interest rate will rise. d. shortage. The real interest rate will fall.
The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk. B) a reduction in maturity. C) a flight to quality. D) a flight to liquidity.