Which one of the following is NOT true of a thin market?
A. It is caused by asymmetric information.
B. There are relatively few high-quality goods sold.
C. There may be some sellers of high-quality goods because people are in a hurry to sell.
D. The price of the good sold will be higher than if the market were thicker.
Answer: D
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In 2011, a dollar could be traded for 100 yen and in 2012 a dollar could be traded for 90 yen. Between these two years, the dollar has become ________ valuable and so the dollar has ________
A) more; appreciated against the yen B) less; depreciated against the yen C) more; appreciated against the dollar D) less; appreciated against the yen E) more; depreciated against the yen
According to the U.S. Supreme Court's 1945 ruling on Alcoa,
a. all monopolies are illegal b. price fixing agreements are illegal under the rule of reason c. small firms can be found to be in violation of the Sherman Antitrust Act d. "mere size is no offense." e. possession of market power is sufficient for a firm to be found in violation of the Sherman Antitrust Act
If two steel firms decide to merge, this merger would be classified as:
a. a horizontal merger. b. a vertical merger. c. a conglomerate merger. d. either a vertical or conglomerate merger depending on the nationality of the companies. e. either a vertical or conglomerate merger depending on the market shares of the two companies.
Professor Cowen suggests that, in practice, fiscal policy is not ideal because:
A. voters typically expect the federal government to balance its budget even during a recession. B. elected officials have an incentive to raise taxes even when the appropriate fiscal policy response is to cut taxes. C. the federal government continually has budget deficits rather than having surpluses when the economy is healthy. D. political infighting makes it unlikely that Congress will ever approve a budget, let alone approve fiscal policy actions.