Mutual interdependence means that each firm in an oligopoly:
A. Faces a perfectly inelastic demand for its product
B. Considers the reactions of its rivals when it determines its pricing policy
C. Depends on the other firms for its inputs
D. Depends on the other firms for its markets
B. Considers the reactions of its rivals when it determines its pricing policy
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A price ceiling can result in which of the following?
A) inefficiency B) black markets C) increased search activities D) All of the above answers are correct.
Proponents of the real business cycle model argue that the short-run aggregate supply curve is
A) flat. B) negatively sloped. C) positively sloped. D) vertical.
In a price-taker market, the short-run market supply curve is the
a. vertical sum of the marginal cost curves of all firms in the market. b. vertical sum of the average variable cost curves of all firms. c. horizontal sum of the marginal cost curves of all firms so long as price exceeds average variable cost. d. horizontal sum of the average total cost curves of all the firms in the market so long as average total cost exceeds the market price.
Other things the same, an increase in the U.S. real interest rate induces
a. Americans to buy more foreign assets, which increases U.S. net capital outflow. b. Americans to buy more foreign assets, which reduces U.S. net capital outflow. c. foreigners to buy more U.S. assets, which reduces U.S. net capital outflow. d. foreigners to buy more U.S. assets, which increases U.S. net capital outflow.