If the price elasticity of DVD recorders is -0.3 and price increases 20%, what happens to the quantity of DVD recorders demanded?
A. quantity increases by 15%
B. quantity decreases by 6%
C. quantity decreases by 26%
D. quantity increases by 21%
Answer: B
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Which of the following is NOT a reason why collusion may be hard to sustain?
A. Firms observe their rivals' prices only imperfectly. B. Marginal costs, and therefore agreed-upon prices, may differ among firms or products. C. Prices wars in practice may not conform to the predictions of the Bertrand model. D. The potential profits from collusion can be so high as to create an incentive not to undercut.
Which of the following portions of the national debt impose a net interest burden on the federal government?
a. treasury bonds held by government agencies b. treasury bonds held by private investors c. treasury bonds held by the Federal Reserve system d. treasury bonds held in the Social Security Trust Fund
How will an unanticipated decrease in aggregate demand influence equilibrium output in the goods and services market?
What will be an ideal response?
Exhibit 10-1 A monopolistic competitive firm
If all firms in the industry are the same as the monopolistic competitive firm shown in this Exhibit 10-1, firms in the long run will:
A. leave the industry. B. earn positive economic profits. C. experience less competition because firms will exit the industry. D. experience competition from new firms that enter the industry.