A decrease in government purchases of goods and services is an example of...
What will be an ideal response?
contractionary fiscal policy
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The application of game theory to economics allows us to understand firm behavior in some forms of oligopoly. Game theory suggests that in a two-firm industry, each firm will
a. avoid pricing high when the other prices low b. select high prices and defend that selection because, in the long run, their profits are higher than if they competed by lowering prices c. end up mistaking the other's intentions, which results in low prices and low profit for both in the long run d. end up colluding with the other to form a cartel e. agree with the other not to allow other firms to enter the industry
Which of the following is an example of an investment?
a. A company placing cash reserves in a bank. b. A company buying Yahoo shares. c. A company augmenting its production capacity. d. A company issuing bonus shares.
Russia experienced a hyperinflation of 2,500 percent per year in the early 1990s, which dipped to 10 percent per year by 2006
a. True b. False Indicate whether the statement is true or false
The law of diminishing marginal returns implies that, in the short run:
A. output must fall beyond a certain point. B. price must fall beyond a certain point. C. the marginal product of the variable input must eventually decrease. D. wages of workers must eventually increase.