Augustin Cournot showed (in 1838) that each of a small number of quantity-setting firms in a homogeneous-product market will sense the influence of the individual firm's own output on market price, and will offer less than the competitive quantity
as a result. Indicate whether the statement is true or false
T When there are only a few firms, each firm will supply a small enough quantity to the market that it will be able to see how its own quantity will affect market price.
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Suppose that Rosa is considering migration to another country. To move, she will have to spend $5000 on transportation and $4000 in application and other processing fees. Rosa's stream of future earnings in her home country is $500,000. She expects to earn a stream of future earnings of $800,000 in another country. Based on this information, Rosa's implicit cost of migrating is:
A. $9,000 B. $500,000 C. $509,000 D. $5,000
If the marginal propensity is 0.75, then a $100 increase in investment will result in a maximum increase in equilibrium real gross domestic product of
A) $40.00 B) $100.00 C) $133.33 D) $400.00 E) $500.00
Suppose that the current exchange rate between the dollar and peso is $1 equals 10 pesos. If the exchange rate changes to $1 equals 8 pesos, which of the following is TRUE?
A) The dollar depreciates and U.S. exports become cheaper. B) The dollar appreciates and U.S. exports become cheaper. C) The peso depreciates and imports from Mexico become cheaper. D) The peso appreciates and imports from Mexico become cheaper.
If government uses fiscal policy to restrain cost-push inflation, we can expect:
A. the unemployment rate to rise. B. the unemployment rate to fall. C. the aggregate demand curve to shift rightward. D. tax-rate declines and increases in government spending.