In a perfectly competitive market, the products sold can be described as:
(a) Homogenous;
(b) Complementary;
(c) Close substitutes;
(d) Both (a) and (c) are correct.
Answer: (a) Homogenous;
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Labor productivity is $20 per hour and aggregate hours are 400 billion hours
a. What does real GDP equal? b. Because of technological advances, labor productivity doubles to $40 per hour. Furthermore, assume that aggregate hours decrease to 300 billion hours. What does real GDP equal?
Which of the following is true of a duopoly with differentiated products?
A) A firm loses all its customers when its rival lowers the price of its product. B) A firm does not lose all its customers when its rival lowers the price of its product. C) A firm faces a perfectly elastic demand curve. D) A firm faces a perfectly inelastic demand curve.
If Happy Feet chooses to Ad and Best Nails then chooses to Ad, Happy Feet earns ________ million in net profit and Best Nails earns ________ million.
Happy Feet wants to prevent Best Nails from entering the nail salon market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Happy Feet and Best Nails have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) $4; $1
B) $1; $4
C) $5; $1
D) $2; $3
If Congress decreases government spending, it is using
A. supply-side policy. B. incomes policy. C. monetary policy. D. fiscal policy.