According to the text, all of the following are reasons for firms to merge except
a. to exercise greater market control
b. to increase control over suppliers of their inputs
c. to increase control over buyers of their products
d. to diversify assets
e. to form a cartel
E
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Which of the following correctly describes a way in which deficit spending can impose a burden on future generations?
I. Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt. II. Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits. III. Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed. A) I only B) II only C) I and III only D) II and III only
Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 27 pillows and 14 blankets would appear
A) along Billie's production possibilities frontier. B) inside Billie's production possibilities frontier. C) outside Billie's production possibilities frontier. D) at the vertical intercept of Billie's production possibilities frontier.
Keynesian economists believe that
a. prices are very flexible b. changes in the money supply could cause changes in velocity c. real GDP is constant in the short run d. the only motive for demanding money is the transactions demand motive e. the economy operates at full employment
Externalities can be positive because
A. marginal damages do not last over time. B. utility can be impacted positively as well as negatively. C. there is no concept for marginal benefit. D. positive externalities are subsidies.