A concentration ratio
a. measures the percentage of total sales of the top firm in the industry.
b. reflects the level of competition in an industry.
c. is inversely related to the price charged by the top firm in the industry.
d. All of the above are correct.
b
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Patents are a source of:
A) legal market power. B) natural market power. C) regulated market power. D) firm-biased market power.
In the long run, a firm in a monopolistically competitive industry produces where its marginal cost
A) is less than its average cost. B) equals its average cost. C) exceeds its average cost. D) equals its price.
Suppose that the current money market equilibrium features an interest rate of 5 percent and a quantity of $2 trillion. If the Fed raises the discount rate, which of the following ismostlikely to be the new money market equilibrium?
a. An interest rate of 6 percent and a quantity of $1.5 trillion. b. An interest rate of 5 percent and a quantity of $2 trillion. c. An interest rate of 4 percent and a quantity of $2.5 trillion. d. None of the above.
Prisoner's dilemma games imply that cooperative behavior between two people or two firms always breaks down. But reality teaches us that people and firms often cooperate successfully to achieve their goals. Why do the results from prisoner's dilemma
games fail to predict real-world results? A) Prisoner's dilemma games do not permit people or firms from reneging on agreements, which often occurs in real-word situations. B) The prisoner's dilemma does not apply to most business situations that are repeated over and over. C) Prisoner's dilemma games predict the behavior of people and firms that engage in illegal activity; most people and firms do not resort to illegal activity. D) Most real-world situations involve more than two people or firms; the prisoner's dilemma is only applicable to situations that involve two parties.