If an oligopolist is going to change its price or output, its initial concern is
A. The response of its competitors.
B. The concentration ratio.
C. A change in its cost structure.
D. The response of the Federal Trade Commission.
Answer: A
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The higher the opportunity cost of doing something, the more likely it will be done
Indicate whether the statement is true or false
Next year, the price of a stock is expected to be $2,200 and the stock will pay a $55 dividend. The interest rate is 10%. Based on the dividend-discount model, what is the current price of this stock
A. $2,050 B. $1,980 C. $2,000 D. $2,035
In deriving the demand schedule for a good, economists assume that
A) consumers have equal incomes to allocate among goods. B) a consumer will allocate all of her income to one good. C) all other influences on demand except the product price are held constant. D) reported income changes at each point on the demand schedule.
Inflation targeting is a policy in which the Fed
A. uses open market operations as a method of discretionary intervention. B. tries to reduce inflation by setting a high federal funds rate target. C. tries to reduce inflation by setting a low federal funds rate target. D. announces an inflation target and then runs monetary policy to hit that target.