Answer the following statements true (T) or false (F)
1) In a Cournot oligopoly, the total profit is less when two firms compete compared to the cartel profits.
2) The more firms in a Cournot oligopoly, the greater the profits for each firm.
3) As the number of firms in a Cournot oligopoly increases, the equilibrium quantity gets closer and closer to the monopoly quantity.
4) In a Cournot oligopoly, if a firm's marginal cost is not constant, its best-response curve will not be linear.
5) In a Stackelberg oligopoly, the follower second firm determines its production from its Cournot best-response function.
1) TRUE
2) FALSE
3) FALSE
4) TRUE
5) TRUE
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The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve. The marginal external cost when 200 billion kilowatt hours are produced is
A) 0¢ per kilowatt. B) 10¢ per kilowatt. C) 20¢ per kilowatt. D) 15¢ per kilowatt. E) 5¢ per kilowatt.
Real GDP measures the
A) total profits earned by all businesses valued using prices from a single year. B) changes in the prices of output measured in dollars. C) general upward drift in prices. D) value of total production linked to prices of a single year.
The implementation of choice architecture that alters people's behavior in a deliberate and predictable way without changing economic incentives much is called:
A. influencing through choice. B. nudging. C. shifting. D. baiting.
Which of the following is not a source of monopoly power?
A. Patents B. Rapid low cost technological change in the industry C. Exclusive control over inputs D. Economies of scale