Explain the difference in focus between government regulation and government antitrust policy.
What will be an ideal response?
Government regulation focuses on modifying the behavior of firms with market power in terms of pricing, output, and/or anticompetitive practices. Government antitrust policy focuses on either the behavior of firms or the structure of an industry (e.g., the degree of industry concentration).
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What is the equilibrium strategy for each firm in a duopolists' dilemma and why do the firms not succeed in colluding to raise the price and profits?
What will be an ideal response?
Short-run macroeconomic equilibrium occurs when
A) structural and frictional unemployment equal zero. B) the equilibrium lies on the long-run aggregate supply curve. C) aggregate demand and short-run aggregate supply intersect. D) A and B
Imperfect policy credibility implies that
A) traders may not believe that a central bank will do what it says. B) a central bank may intentionally undermine its policies. C) central bank authorities cannot be trusted. D) currency traders will often try to undermine central bank movements.
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.