In the Cournot duopoly model, each firm assumes that
A) rivals will match price cuts but will not match price increases.
B) rivals will match all reasonable price changes.
C) the price of its rival is fixed.
D) the output level of its rival is fixed.
D
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If the FOMC purchases government bonds priced at $5,000 from a bond dealer who banks at National Bank, and if the reserve requirement is 20 percent, then the required reserves of National Bank:
a. increase by $5,000. b. increase by $4,000. c. increase by $1,000. d. decrease by $5,000. e. decrease by $1,000.
Suppose that the government sets a minimum price for soybeans at $5 a pound above the equilibrium price. This leads to a quantity traded:
A. at the equilibrium quantity. B. below the equilibrium quantity. C. above the equilibrium quantity. D. There is not sufficient information.