Advertising can enhance economic efficiency when it:
A. increases brand loyalty.
B. raises entry barriers.
C. increases consumer awareness of substitute products.
D. boosts average total cost.
Answer: C
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If real GDP is greater than potential GDP, then to restore equilibrium, ________ and the price level ________
A) the aggregate supply curve shifts rightward; falls B) the aggregate demand curve shifts leftward; rises C) the aggregate supply curve shifts leftward; rises D) the aggregate demand curve shifts rightward; falls E) potential GDP increases; falls
Jackson buys an automobile insurance policy and then decides to drive recklessly because he knows he is insured in case he has an accident. This describes the problem of
A) adverse selection. B) asymmetric information. C) moral hazard. D) risk pooling.
Which of the following is an example of an institutional investor?
a. A large pension fund b. A person who buys stocks for his portfolio c. A company that invests millions in a new product d. A dealer who buys a painting expecting huge returns
As the number of firms in an oligopoly increases, the magnitude of the
a. output effect increases. b. output effect decreases. c. price effect increases. d. price effect decreases.