Situations in which firms expect one thing to happen but then something else happens are called:
A.
Recessions
B.
Shocks
C.
Business cycles
D.
Fluctuations
B.
Shocks
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What is the Nash equilibrium of this one-shot game?
a. Firm A will charge a lower price and firm B will charge a lower price b. Firm A will charge a higher price and firm B will charge a lower price c. Firm A will charge a lower price and firm B will charge a higher price d. Firm A will charge a higher price and firm B will charge a higher price
In a perfectly competitive industry,
a. the market price is determined at the intersection of the market supply and demand curves b. the typical firm will just break even in the short run c. a rise in the market price will attract new entrants d. economics profits are a signal for new consumers to enter e. each firm faces the downward sloping market demand curve
If a currency increases in value in response to market forces, this process is known as
A. reflation. B. revaluation. C. appreciation. D. value-added.
Refer to the above figure. When the price in the market is $4, economic profits will equal
A. $200. B. $400. C. $300. D. $100.