Suppose an oligopolistic producer assumes its rivals will ignore a price increase but match a price cut. In this case the firm perceives its:
A. demand curve as being of unit elasticity throughout.
B. supply curve as kinked, being steeper below the going price than above.
C. demand curve as kinked, being steeper below the going price than above.
D. demand curve as kinked, being steeper above the going price than below.
Answer: C
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Economic theory defines capital as
A) anything that is scarce. B) non-human resources. C) produced resources used to produce future goods. D) resources containing a positive opportunity cost. E) stocks and bonds.
Which of the following would shift a nation's production possibilities frontier inward?
A) discovering a cheap way to convert sunshine into electricity B) producing more capital equipment C) an increase in the unemployment rate D) a law requiring workers to retire at age 50