In the acronym SPENT, what does the “S” stand for?
a. change in seller’s output prices
b. change in shortages
c. change in seller’s input prices
d. change in surplus
c. change in seller’s input prices
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A natural monopoly
A. arises as a result of legal barriers to entry. B. occurs when one firm controls a natural resource. C. arises when one firm can meet the entire market demand at a lower average total cost than two or more firms. D. Both answers A and B are correct. E. Both answers A and C are correct.
Which of the following is a fixed cost for Wendy's Hamburgers?
a. the cost of beef b. electricity to light up the Wendy's sign c. gasoline for the trucks that deliver supplies to the various franchises d. interest on funds borrowed to build new facilities e. expenditures on paper and plastic for packaging
Although the practice of predatory pricing is a common claim in antitrust suits, some economists are skeptical of this argument because they believe
a. the evidence of its practice is nearly impossible to collect. b. predatory pricing is not a profitable business strategy. c. even though predatory pricing is a profitable business strategy, it is on balance beneficial to society. d. predatory pricing actually attracts new firms to the industry.
One potential problem with using fiscal policy to close recessionary output gaps is that:
A. sustained government deficits can be harmful to long-run economic growth. B. it may be offset by automatic stabilizers. C. decreased government spending can cause inflationary pressure to build. D. reductions in interest rates can reduce savings and, therefore, investment.