In a Cournot oligopoly, a decrease in a firm's marginal cost leads to:
A. reduced output and a lower price.
B. higher output and a higher price.
C. higher output and a lower price.
D. reduced output and a higher price.
Answer: C
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David and Asher buy the same pair of sneakers, but each in the wrong size. David proposes a size swap with Asher. This is an example of a. barter, since the sneakers in the correct size represent a medium of exchange
b. barter, since the sneakers in the correct size have intrinsic value to both David and Asher. c. money, since the sneakers in the correct size do not have any intrinsic value. d. money, since the sneakers in the correct size represent a medium of exchange.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.
If the income elasticity of demand for lard is -3.00, this means that:
A. lard is a substitute for butter. B. lard is a normal good. C. lard is an inferior good. D. more lard will be purchased when its price falls.
The "direct effect" of an increase in the money supply is to
A. increase aggregate supply as producers anticipate higher future profits. B. decrease the rate of inflation. C. increase aggregate demand as people spend their excess money balances. D. increase aggregate demand as interest rates fall and investment spending increases.