The principle of diminishing returns in capital implies that a country that lost much of its capital during a war will:
A) grow more slowly than its enemy during the war.
B) never catch up with countries that never go to war.
C) keep it from being permanently rich.
D) experience a higher growth rate than before the war.
Answer: D) experience a higher growth rate than before the war.
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The government of Healthyland imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the price of salt is $0.40 per pound. The demand for salt is perfectly inelastic and the elasticity of supply is 1.5
With the tax, the price of salt paid by buyers in Healthyland is A) $0.40 per pound. B) $0.45 per pound. C) $0.35 per pound. D) $0.50 per pound.
Suppose four companies in an industry are considering a merger. Their market shares are: Company A 25%, Company B 16%, Company C 12%, and Company D 40%. Which of the following represents their score using the HHI method?
a. 93 b. 656 c. 1,600 d. 2,625
One of the benefits of decentralization is that
A. there are economies of scale if local managers make pricing decisions. B. it lowers the opportunity cost of the time of the higher management. C. local managers have a strong incentive to maximize a firm's value. D. full use can be made of the central manager's knowledge and expertise.
In this graph, how does the expansionary policy influence aggregate demand?
a. It prevents the aggregate demand curve from moving.
b. It shifts the aggregate demand curve to the left.
c. It shifts the aggregate demand curve to the right.
d. It changes the slope of the aggregate demand curve.