Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25. Craig Raymond, however, is a safer driver than the average female driver under age 25. Craig's higher insurance rate reflects:
A. monopoly power.
B. statistical discrimination.
C. the insurance firm's taste for discrimination.
D. human-capital discrimination.
Answer: B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Short run refers to a period of time during which:
a. all the factors are constant. b. all the factors are variable. c. the producer can shift from one plant size to another. d. some factors are fixed while some others are variable. e. the producer cannot change the level of output.
When a domestic monopolist becomes subject to international competition, it faces:
a. a perfectly inelastic demand curve. b. a unitary elastic demand curve. c. a perfectly elastic demand curve. d. no demand curve.
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, if this economy is an autarky, its equilibrium price is:
A. $130 at a quantity of 500. B. $175 at a quantity of 815. C. $130 at a quantity of 1150. D. $215 at a quantity of 500.