Use the following diagram to answer the next question.
Based on this diagram, we can say ________.
A. a contractionary policy is likely to be more effective than an expansionary policy
B. the Fed is pursuing a contractionary monetary policy
C. the Fed is pursuing an expansionary monetary policy
D. an expansionary policy is likely to be more effect than a contractionary policy
Answer: A
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One practical implication of a kinked market supply curve is that:
A) producer surplus is not defined at the kink point. B) the MC = MR rule does not hold at the kink point. C) the market supply elasticity for a price increase may be different than the market supply elasticity for a price decrease at the kink point. D) All of the above are true.
Figure 13-4
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The above matrix (Figure 13-4) displays the possible profit results of two firms, A and B, from following two different possible strategies: charging a high price and charging a low price. In each cell, the first number is the profit of firm A, and the second number is the profit of firm B.
a. Assume that collusion is not possible. Determine the optimal strategy for each firm. Explain why it is the best strategy to follow.
b. Based on your answer to a., explain why firms collude. What are the pitfalls of collusion?
What will be an ideal response?
Which of the following is an argument against the idea that tariffs are necessary to protect against dumping?
a. It is difficult to assess whether a country is dumping its products or simply has lower production costs. b. Products dumped by foreign suppliers are usually outdated and pose no threat to domestic suppliers. c. It is considered more important to stockpile foreign goods to maintain supply during a war. d. Tariffs are not needed to counter dumping because environmental laws are in place to punish violators.
What determines the economic rent for land? Explain from a supply and demand perspective
What will be an ideal response?