Answer the following statement(s) true (T) or false (F)
1. Near monopolists can be innovators.
2. The Sherman Antitrust Act encouraged price fixing.
3. The Clayton Act outlawed predatory pricing.
4. Price discrimination requires significant market power..
5. College financial aid is a form of price discrimination.
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
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When policy makers choose between tax policy and spending policy to affect the level of aggregate demand, they tend to choose on the basis of
a. how large a public sector they want. b. how much they want to change aggregate demand. c. how much they want to change aggregate supply. d. which has the larger multiplier.
Which of the following is not a determinant of demand?
a. the price of a resource that is used to produce the good b. the price of a complementary good c. the price of the good next month d. the price of a substitute good
Refer to the diagram for the corn market. What effect will a price support of B have on the gross income of farmers?
A. Gross income will be unchanged, although profits will rise.
B. Gross income will increase from 0MFG to 0BKL.
C. Gross income will increase from 0AJH to 0BCG.
D. Gross income will decrease from 0BCG to 0BKL.
In the money market, if real GDP increases, then the demand for money ________ and the equilibrium nominal interest rate ________
A) decreases; rises B) decreases; falls C) increases; falls D) increases; rises E) increases; does not change