Answer the following statements true (T) or false (F)
1) In a successive monopoly structure, if distributor has a constant marginal cost, the wholesale demand curve will lie below the retail marginal revenue curve.
2) Vertical integration is not an economically sound decision in a successive monopoly situation.
3) Vertical integration of a monopoly and a perfectly competitive firm does not yield greater economic profit.
4) If double marginalization exists between an upstream firm and a downstream firm, the vertical integration of the two firms will generate more economic profit.
5) The wholesale demand for a monopoly retailer depends of the retailer's marginal revenue.
1) TRUE
2) FALSE
3) TRUE
4) TRUE
5) TRUE
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Refer to Figure 12-14. Consider a typical firm in a perfectly competitive industry which is incurring short-run losses. Which of the diagrams in the figure shows the effect on the industry as it transitions to a long-run equilibrium?
A) Panel A B) Panel B C) Panel C D) Panel D
How does the Open Market Trading Desk conduct its operations?
A) directly with private securities dealers on the floor of the New York Stock Exchange B) directly with private securities dealers on the floor of the Federal Reserve Bank of New York C) over-the-counter electronically with private securities dealers D) by sending its buy and sell orders to the U.S. Treasury for execution
Over the long run, per capita incomes in different regions of the United States have
a. gradually diverged with the Northeastern region leading all other income groups. b. gradually converged. c. gradually converged until roughly 1985, and then diverged as the Western states outpaced other regions. d. have converged, with the exception of the South.
When the opportunity cost of producing carrots increases as more carrots are produced, then:
a. no more carrots will be produced. b. resources are equally suited to the production of carrots and to other goods. c. the production possibilities curve is a straight line. d. the production possibilities curve becomes positively sloped. e. the law of increasing costs is present.