PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 11, Problem 13RQ
How do we measure a four-firm concentration ratio? What does a high measure mean about the extent of competition?
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Students have asked these similar questions
Analyze the graph below, showing the Gross Federal Debt as a percentage of GDP for the
United States (1939-2019). Which of the following is correct?
FRED
Gross Federal Debt as Percent of Gross Domestic Product
Percent of GDP
120
110
100
60
50
40
90
30
1940
1950
1960
1970
Shaded areas indicate US recessions
1980
1990
2000
2010
1000
Sources: OMD, St. Louis Fed
myfred/g/U
In 2019, the Federal Government of the United States had an accumulated debt/GDP higher than
100%, meaning that the amount of debt accumulated over time is higher than the value of all goods
and services produced in that year.
The debt/GDP is always positive during this period, so the Federal Government of the United States
incurred in budget deficits every year since 1939.
From the mid-40s until the mid-70s, the debt/DGP was decreasing, meaning that the Federal
Government of the United States was running a budget surplus every year during those three decades.
During the second half of the 1970s, the Federal Government…
An imaginary country estimates that their economy can be approximated by the AD/AS model
below. How can this government act to move the equilibrium to potential GDP?
LRAS
Price Level
P
Y
Real GDP
E
SRAS
AD
The AD/AS model shows that a contractionary fiscal policy is suitable, but the choice of increasing
taxes, decreasing government expenditure or doing both simultaneously is mostly political
The AD/AS model shows that increasing taxes is the best fiscal policy available.
The AD/AS model shows that decreasing government expenditure is the best fiscal policy available.
The AD/AS model shows that an expansionary fiscal policy capable of shifting the AD curve to the
potential GDP level would decrease Real GDP but increase inflationary pressures
Question 1 Coursology
Consider the four policies bellow. Classify them as either fiscal or monetary policy:
I. The United States Government promoting tax cuts for small businesses to prevent a wave of
bankruptcies during the COVID-19 pandemic
II. The Congress approving a higher budget for the Affordable Health Care Act (also known as
Obamacare)
III. The Federal Reserve increasing the required reserves for commercial banks aiming to
control the rise of inflation
IV. President Joe Biden approving a new round of stimulus checks for households
I. fiscal, II. fiscal, III. monetary, IV. fiscal
I. fiscal, II. monetary, III. monetary, IV. monetary
I. monetary, II. fiscal, III. fiscal, IV. fiscal
I. monetary, II. monetary, III. fiscal, IV. monetary
Chapter 11 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 11 - Is it true that a merger between two films that...Ch. 11 - Is it true that the four-firm concentration ratio...Ch. 11 - Some years ago. two intercity bus companies,...Ch. 11 - As a result of globalization and new information...Ch. 11 - Why would a firm choose to use one or more of the...Ch. 11 - Urban transit systems, especially those with rail...Ch. 11 - From the graph you drew to answer Exercise 11.6,...Ch. 11 - What real world changes made the deregulation...Ch. 11 - What are some of the benefits of the deregulation?Ch. 11 - What might some of the negatives of deregulation...
Ch. 11 - What is a corporate merger? What is an...Ch. 11 - What is the goal of antitrust policies?Ch. 11 - How do we measure a four-firm concentration ratio?...Ch. 11 - How do we measure a Herfindahl—Hirshman Index?...Ch. 11 - Why can it be difficult to decide what a market is...Ch. 11 - What is a minimum resale price maintenance...Ch. 11 - What is exclusive dealing? How might it reduce...Ch. 11 - What is a tie-in sale? How might it reduce...Ch. 11 - What is predatory pricing? How might it reduce...Ch. 11 - If public utilities are a natural monopoly, what...Ch. 11 - If public utilities are a natural monopoly, what...Ch. 11 - What is cost-plus regulation?Ch. 11 - What is price cap regulation?Ch. 11 - What is deregulation? Name some industries that...Ch. 11 - What is regulatory capture?Ch. 11 - Why does regulatory capture reduce the...Ch. 11 - Does either the four-firm concentration ratio or...Ch. 11 - What would be evidence of serious competition...Ch. 11 - Can you think of any examples of successful...Ch. 11 - If you were developing a product (like a web...Ch. 11 - In the middle of the twentieth century, major U.S....Ch. 11 - Why are urban areas willing to subsidize urban...Ch. 11 - Deregulation, like all changes in government...Ch. 11 - Do you think it is possible for government to...Ch. 11 - Use Table 11.5 to calculate the four-firm...Ch. 11 - Use Table 11.5 and Table 11.6 to calculate the...Ch. 11 - If the transit system were allowed to operate as...Ch. 11 - If the transit system were regulated to operate...Ch. 11 - If the transit system were regulated to provide...
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