Assume that both the corporate and noncorporate sectors are in long-run equilibrium before the imposition of a corporate profits tax. In the short run, the imposition of a corporate profits tax will ________ profits in the noncorporate sector, but ________ profits in the corporate sector.
A. decrease; increase
B. increase; decrease
C. not change; not change
D. not change; decrease
Answer: D
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An oligopoly between two firms is called
A) a duopoly. B) an oligopoly; there are no special terms used for oligopolies with different numbers of firms. C) a biopoly. D) a dual-firm oligopoly.
Which of the following is an example of the snob effect?
A) The fewer consumers that buy the operating system, the fewer the applications that will be available. B) The more people that buy a luxury watch, the less value consumers put on the watch. C) The fewer ATMs available in the city, the fewer consumers want to join the network. D) None of the above.
During 2001-2004, the European Union had a large trade surplus with China.
Answer the following statement true (T) or false (F)
Which of the following is an example of the economies of scale argument for increased profits for large financial holding companies?
A. Financial holding companies are well diversified so risk is reduced. B. Financial holding companies offer a wide array of services under one name. C. Financial holding companies need only one CEO, one Board of Directors, and one accounting system regardless of size. D. The profitability of financial holding companies does not rely on one particular line of business.