Mutual interdependence means that each oligopolistic firm:
A. faces a perfectly elastic demand for its product.
B. must consider the reactions of its rivals when it determines its price policy.
C. produces a product identical to those of its rivals.
D. produces a product similar but not identical to the products of its rivals.
Answer: B
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As long as a bank's stockholders' equity is greater than zero:
A) the stockholders in the bank bear all the risk involved. B) the customers of the bank bear all the risk involved. C) the bank bears all the risk involved. D) bank runs are not possible.
The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then
A) the market is in equilibrium. B) there is a surplus and the price of t-shirts will fall. C) there is a shortage and the price of t-shirts will fall. D) there is a shortage and the price of t-shirts will rise. E) there is a surplus and the price of t-shirts will rise.
Firms need to borrow for operating purposes because they
A. need constant bailouts. B. are always in debt. C. need to pay for goods and services before they will have revenue from their sales. D. need to pay for goods and services after they have sold them.
Ernie's Sushi-On-A-Stick is a perfectly competitive firm currently employing 75 workers. The marginal revenue product of the 75th worker is $9.00 per hour. The wage rate is $12.00 per hour. To increase profits, this firm should
A. continue hiring 75 workers because the firm earns a surplus of $3.00 on each worker hired. B. increase the price of sushi-on-a-stick so that the marginal revenue product increases to $12.00 per hour. C. decrease employment until the MRP of labor equals $12.00. D. increase employment until the MRP of labor equals $12.00.