Macroeconomics

What is the significance of the mutual interdependence among the firms

What is the significance of the mutual interdependence among the firms in an oligopolistic market? What will be an ideal response?   ANSWER The assertion that the firms in an oligopolistic market are mutually interdependent means that the decisions of one firm have an effect on the decisions of the other firms in the market. […]

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Date: September 10th, 2020

Assume an auto firm’s factories are capable of producing both large an

Assume an auto firm’s factories are capable of producing both large and small cars and are operating at full capacity. Assume the price of large cars increases due to a shift in consumers’ preferences toward large cars and away from smaller cars. What would reasonably be expected to happen to the equilibrium price and quantity […]

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Date: September 10th, 2020

Net exports are: A) negatively related to domestic income, positively

Net exports are: A) negatively related to domestic income, positively related to income in the rest of the world, and positively related to currency appreciation. B) negatively related to domestic income, positively related to income in the rest of the world, and positively related to currency depreciation. C) positively related to domestic income, positively related […]

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Date: September 10th, 2020

Assume the auto market is initially in equilibrium with imports from J

Assume the auto market is initially in equilibrium with imports from Japan taking up a significant share of the market. Now assume a quota on imports of Japanese cars is established. What will occur at the initial equilibrium price to signal market participants regarding the change that has taken place? A) A surplus is created […]

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Date: September 10th, 2020

The text’s discussion of the airline industry, the soft drink industry

The text’s discussion of the airline industry, the soft drink industry, and the doughnut industry reveals a common theme when it comes to the types of competitive practices firms in each industry engage in. What is it and what advantage does it offer firms?   ANSWER Firms in each of the industries listed above tend […]

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Date: September 10th, 2020