Refer to Figure 6-1. A perfectly inelastic demand curve is shown in
A) Panel A. B) Panel B. C) Panel C. D) Panel D.
A
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Assume the managers of the two major firms in an industry agree to set the price of their output at a fixed level so as to discourage new entrants into the market. This would be considered a violation of the:
A) Sherman Act of 1890. B) Clayton Act of 1914. C) Federal Trade Commission Act of 1914. D) Celler-Kefauver Act of 1950.
The quality of a product
A) is usually unknown to the seller and the buyer. B) leads to adverse selection. C) creates noise in a market. D) is a hidden characteristic.
Firms can only use one form of price discrimination
Indicate whether the statement is true or false
According to the classical model, more saving leads to more investment because
A) the people who save are the same people who invest. B) the interest rate adjusts to keep investment equal to saving. C) saving and investment are two sides of the same activity. D) the interest rate is set by the federal government.