Contractionary monetary policy:
A. increases the U.S. interest rate and decreases the U.S. exchange rate.
B. increases the U.S. interest rate and increases the U.S. exchange rate.
C. lowers the U.S. interest rate and increases the U.S. exchange rate.
D. lowers the U.S. interest rate and decreases the U.S. exchange rate.
Answer: B
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Suppose that the price of bread rises. This rise could be the result of
A) a decrease in the supply of bread. B) an increase in the supply of bread. C) a decrease in the demand for bread. D) Both answers A and C are correct. E) Both answers B and C are correct.
Consider the market for cable television in the figure above. This graph depicts a natural monopoly because the
A) marginal cost curve is constant. B) demand curve is downward sloping. C) average cost curve is declining as it crosses the demand curve. D) marginal revenue curve is downward sloping.
Adverse selection refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off
Indicate whether the statement is true or false
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.