Suppose two duopolists operate at zero marginal cost. The market demand is p = a - bQ. If firm 1 is the Stackelberg leader, what level of output will it choose?
A) q1 = (a - bq2)/2b
B) q1 = (a - 2bq2)/2b
C) q1 = a/b
D) q1 = a/2b
D
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Assuming that the United States is the domestic economy, ________ are goods and services produced by ________ and purchased by ________
A) exports; foreign countries; the United States B) exports; the United States; the United States C) imports; foreign countries; the United States D) imports; foreign countries; foreign countries
Patent laws promote technical progress in all of the following ways except one. Which is the exception?
a. They allow other firms to copy successful products as soon as they are marketed. b. They prevent duplication of inventions. c. They provide a stimulus to innovation. d. They provide the inventor with a temporary monopoly. e. They increase a firm's incentive to incur the up-front costs of developing new products.
An increase in our federal government's budget deficit will likely:
a. increase the national debt. b. increase interest rates. c. be less effective in stimulating the economy than the spending multiplier implies because of crowding out. d. decrease borrowing by households and businesses. e. All of the answers are correct.
Firms will only invest if there are profits in their industry.
Answer the following statement true (T) or false (F)