Behavior on the part of the firm that allows it to comply with the letter of the law but violate the spirit reducing the law's effect is
A) asymmetric information.
B) creative response.
C) the lemons problem.
D) only a problem in a monopoly.
B
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During 2013, a country reported that its real GDP increased by $3.0 billion. If the slope of its aggregate planned expenditure curve is 0.9, then which of the following might have led to the increase in real GDP?
A) Investment decreased by $0.3 billion. B) Imports increased by $0.3 billion. C) Government expenditure on goods and services increased by $3 billion. D) Exports increased by $0.3 billion. E) Exports decreased by $0.3 billion.
Two identical firms that share a market and produce a homogenous good will find the Bertrand Oligopoly LEAST attractive because
A) Cartels generate the highest joint profit. B) a Cournot Oligopoly will generate more profit than a Bertrand Oligopoly. C) they want to avoid a price war that leads to profit erosion and P = MC. D) All of the above.
The common factors that give rise to all principal-agent problems include the
a. unobservability of some manager-agent action b. presence of random disturbances in team production c. the greater number of agents relative to the number of principals d. a and b only e. none of the above
The long-run equilibrium of a monopolistic competitor differs from the long-run equilibrium of a perfect competitor in that
A) the monopolistic competitor makes economic profits. B) the monopolistic competitor sets price equal to marginal cost. C) the monopolistic competitor produces at the minimum point of its average total cost curve. D) the monopolistic competitor charges a price that exceeds marginal cost.