Oligopoly is a situation when there
A) is one firm in the industry that is large relative to the size of the economy.
B) are a few large firms in the industry.
C) are too many firms in the industry and there is excess capacity.
D) is one large firm and many smaller firms forming a competitive fringe.
Answer: B
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How does an increase in the price of laptop memory chips affect the market of laptops?
a. The demand curve for laptops to shift to the right b. The demand curve for laptops to shift to the left c. The supply curve for laptops to shift to the right d. The supply curve for laptops to shift to the left
The Gibson Paradox shows that:
a. Central banks face a paradox when they want to stimulate their economies because consumers may not spend the newly created money. b. When monetary policy is loose and expected inflation rises, the nominal interest rate rises rather than falls. c. When fiscal policy is loose (i.e., high government spending and falling tax rates), society as a whole is more willing (not less willing) to give up consumption today for consumption in the future. d. When expected inflation rises, nominal interest rates fall rather than rise. e. When expected inflation falls, government spending tends to increase, rather than decrease, as is frequently assumed.