Because an oligopoly is characterized by
A. few large sellers, each seller has some influence over the market price.
B. a single seller of a product that has few suitable substitutes, the seller is a price maker.
C. many small sellers, each firm must differentiate its product.
D. a few sellers selling a differentiated product, each seller makes its price and output decisions independently.
Answer: A
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If the current account balance has a $70 million deficit and there was no change in official reserves during that year, then we know that
A) net transfers were -$70 million. B) the capital account balance must have a $70 million deficit. C) the balance of payments must register a $70 million surplus. D) the official settlements account balance must have a $70 million surplus. E) the capital and financial account balance must have a $70 million surplus.
A person buys a bond with a face value of $10,000 for $9,195. Each year until the maturity date the bond buyer receives a coupon payment of $450 from the issuer of the bond. The coupon rate on the bond is
A. 4.9 percent. B. 4.5 percent. C. 7.0 percent. D. 6.75 percent.
Barriers to entry enable many monopolists to
A) charge as high a price as they want. B) make people buy more of a good than they really want. C) earn economic profits in the long run. D) manipulate the government into providing special favors for themselves.
Insurers try to minimize moral hazard by:
a. charging higher premiums to individuals than to groups. b. requiring advance payments of premiums. c. refusing to sell insurance to individuals with chronic illnesses. d. only selling policies to individuals with high ethical standards. e. charging deductibles and coinsurance.