The government is likely to block a merger if:
A. the firms remaining would all earn economic profit.
B. it can be established that the merger would substantially reduce competition.
C. the firms remaining would be able to charge a price above marginal cost.
D. the firms that are merging are producing different products.
Answer: B
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A reserve requirement set by the Federal Reserve is the:
A. minimum amount of currency banks must hold in their vaults. B. maximum amount of currency banks are allowed to hold in their vaults. C. minimum ratio of reserves to bank deposits that commercial banks are allowed to maintain. D. maximum ratio of reserves to bank deposits that commercial banks are allowed to maintain.
Use the figure below to answer the following question.
Refer to the three demand curves. An "increase in quantity demanded" caused by a change in price would be illustrated by a change from
A. point 2 to point 5. B. point 4 to point 6. C. point 4 to point 1. D. point 5 to point 1.
A change in net taxes affects the equilibrium quantity of GDP demanded_____
a. in the same way as a change in government purchases does b. in the same way as a change in planned investment does c. in the same way as a change in net exports does d. only indirectly, changing the level of disposable income e. in an unpredictable manner
The monopolist's demand curve is identical to
a. the monopolistic competitor's demand curve b. the industry demand curve c. a horizontal line that represents a constant price across the production range d. mutual interdependence e. a collection of firms producing the same good