In the housing market, supply and demand are
a. more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
b. more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.
c. more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
d. more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.
d
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Producer surplus is measured as the
A) area under the demand curve above market price. B) entire area under the supply curve. C) area under the demand curve above the supply curve. D) area above the supply curve up to the market price.
Consider the following information for a simultaneous move game: If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is:
A. for each firm to advertise in early years, but not advertise in later years. B. for each firm to not advertise in any year. C. for neither firm to advertise in early years, but to advertise in later years. D. for each firm to advertise every year.
Which of the following is NOT a characteristic of oligopoly firms?
A) strategic dependence B) product differentiation C) non-price competition, such as advertising and promotions D) perfectly elastic demand curves
Automatic stabilizers smooth fluctuations in the economy because they produce changes in the government's budget that:
A. Reinforce changes in GDP B. Help offset changes in GDP C. Produce a cyclically-adjusted budget D. Produce a standardized budget