Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product.
Suppose Quick Buck and Pushy Sales decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Quick Buck cheats by reducing its price to $1 while Pushy Sales continues to comply with the collusive agreement, then Quick Buck's economic profit will be ________.
A. $4,000
B. $3,000
C. $2,000
D. $6,000
Answer: B
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If the economy receives an influx of new workers from immigration,
A) we will move down along the long-run aggregate supply curve. B) we will move up along the long-run aggregate supply curve. C) the long-run aggregate supply curve will shift to the right. D) the long-run aggregate supply curve will shift to the left.
The American individual income tax is:
A. progressive. B. regressive. C. proportional. D. a lump sum.
In recent years, people have benefited from greater amounts of leisure time. This trend:
A. has caused GDP to rise. B. has caused GDP to fall. C. made GDP fluctuate randomly. D. is not accounted for in GDP.
Which of the following causes the opportunity cost of holding money in the form of cash to decrease?
A. Higher short-term yields. B. Lower interest rates. C. Higher long-term yields. D. Higher reserve requirement.