The above figure shows the reaction functions for two pizza shops in a small isolated town. Firm B producing 100 pizzas and firm A producing 50 pizzas is NOT a Cournot equilibrium because
A) Cournot duopolists agree to share the market equally.
B) firm B is not on its best-response function.
C) firm A is not on its best-response function.
D) neither firm is on its best-response function.
B
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Suppose a perfectly competitive market is in a short-run equilibrium. If some firms exit the market, the profit of the remaining firms ________; if some firms enter the market, the profit of each existing firm ________
A) decreases; is unchanged B) increases; decreases C) increases; is unchanged D) is unchanged; is unchanged E) decreases; increases
The consumer price index (CPI) _____ inflation because it includes an item in the market basket only after the product becomes _____
a. overstates; unpopular b. overstates; obsolete c. overstates; widely used d. understates; widely used e. understates; obsolete
Which of the following is most likely to be over consumed?
A. Sparkling water B. Tap water C. Bottled water D. Free water
Which of the following is responsible for controlling the money supply in the United States?
a. The U.S. Congress. b. The Board of Governors of the Federal Reserve System. c. The U.S. Treasury. d. The Council of Economic Advisors.