In the presence of negative pollution externalities, it is more efficient to have Cournot competitors than Bertrand competitors.
Answer the following statement true (T) or false (F)
False
Rationale: It may be more efficient, or it may not. It depends on how big the externality is. If it is relatively small, the competitive outcome of p=MC under Bertrand competition is still more efficient than the Cournot outcome that restricts output too much. If the externality is large, the Cournot outcome might lie closer to the efficient output quantity.
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In 2012, the U.S. federal government had a budget deficit. If there is no Ricardo-Barro effect, the budget deficit ________ the real interest rate and ________ the equilibrium quantity of investment
A) lowered; increased B) raised; increased C) lowered; decreased D) raised; decreased E) did not change; did not change
Changes in the saving rate, labor-force growth rate, and depreciation rate will ________ the steady-state level of real GDP per capita and will ________ the steady-state growth rate
A) affect; affect B) affect; not affect C) not affect; affect D) not affect; not affect