Wgu C211 Study Guide Questions Exam Questions (67 Terms) With Verified Definitions Updated 2024

Name first mover advantages: (Chp 10.3) {Ans: 1. Proprietary, technological leadership 2. Pre-emption of scarce resources 3. Establishment of entry barriers for late entrants 4. Avoidance of clash with dominant firms at home 5. Relationships with key stakeholders such as governments}Policymakers can influence aggregate demand with monetary policy. {Ans: 1. An increase in the money supply reduces the equilibrium interest rate for any given price level. Because a lower interest rate stimulates investment spending, the aggregate-demand curve shifts to the right. 2. A decrease in the money supply raises the equilibrium interest rate for any given price level and shifts the aggregate-demand curve to the left.}Variable that can shift the demand curve: {Ans: -Income -Prices of related goods -Tastes -Expectations -Number of buyers}How does the prisoner's dilemma apply to oligopoly? {Ans: Each oligopolist has an incentive to cheat. Just as self-interest drives the prisoners in the prisoners' dilemma to confess, self-interest makes it difficult for the oligopolists to maintain the cooperative outcome with low production, high prices, and monopoly profits.}Mixed economy {Ans: An economy that has elements of both a market economy and a command economy.}Total surplus {Ans: Value to buyers - Cost to