Figure 10-7
Which of the panels in Figure 10-7 shows an economic recession caused by primarily by a change aggregate demand?
a.
Panel (A)
b.
Panel (B)
c.
Panel (C)
d.
Panel (D)
a
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What is the potential drawback if firms follow a price leadership model in an actual market?
A) The price leader's behavior may be interpretted as collusion and be subject to antitrust sanctions. B) Excessive price signalling may force all of the firms to adopt price-taking strategies, which reduces overall profits among the firms. C) Disputes about which firm should be the price leader may lead to price wars. D) Signalling efforts increase the firms' fixed costs of production.
If the government intervenes and corrects the externality in the situation described below, we would expect:
It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. A. The output of the paper mills to increase B. The price of paper from the mills to decrease C. Production of the hydroelectric power plants to decrease D. Production in the paper mills to decrease