Keynes believed that during an economic downturn, firms would ________ because consumers would ________.
A. hire more workers; increase their spending
B. lay off workers; spend too much
C. hire more workers; decrease their spending
D. have no incentive to hire workers; spend too little
Answer: D
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When individuals or firms make an investment, they incur costs today in the hope of future gains
Indicate whether the statement is true or false
If Bill is willing to pay $10 for one good X, $8 for a second, and $6 for a third, and the market price is $5, then Max's consumer surplus is:
a. $24 b. $18. c. $9 d. $6.
______ occur when a single firm can produce two or more products more cheaply than can two separate firms.
A. Economies of scale B. Economies of scope C. Diseconomies of scale D. Increasing returns to scale
Which oligopoly model leads to price rigidity? Graphically show why.
What will be an ideal response?