Which oligopoly model results in firms successively undercutting their rivals' prices until the competitive outcome is reached?
a. The contestable market model.
b. The Cournot model of oligopoly.
c. The Bertrand model of oligopoly.
d. The monopolistic competition model.
c. The Bertrand model of oligopoly.
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If the economy automatically tends toward full employment, then government stabilization policy
A. must be constantly in force. B. will be necessary only in recessions. C. will be necessary only in inflationary periods. D. will not be necessary.
Suppose China can produce either 300 telephones or 200 DVD players, and Japan can produce either 200 telephones or 100 DVD players. Implicitly, Japan has
A. A comparative but not necessarily an absolute advantage in telephones. B. An absolute but not necessarily a comparative advantage in telephones. C. Neither a comparative nor an absolute advantage in telephones. D. Both an absolute and a comparative advantage in telephones.