The nominal interest rate equals the:
A. inflation rate minus the real interest rate.
B. real interest rate minus the inflation rate.
C. real interest rate plus the inflation rate.
D. real interest rate divided by the inflation rate.
Answer: C
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Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?
A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons
An incumbent's threat to use limit pricing if a firm enters the market
A) is credible if the firms have identical costs and market demand supports both firms. B) is credible if the firms have different costs and market demand won't support both firms. C) is not credible if the firms have different costs and market demand won't support both firms. D) is cheap talk, because the other firm will enter and the incumbent will still be able to charge monopoly pricing.