The amount of reserves in the economy is often determined by the amount of money in the economy that will achieve a particular interest rate. This reflects the fact that the money supply is:
A. endogenous.
B. implicit.
C. extrapolative.
D. fiat.
Answer: A
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A market consequence of a price floor is that the price consumers pay with the floor when compared to the price they paid without the floor,
a. falls so that there is an excess supply b. falls so that there is an excess demand c. increases so that there is an excess supply d. increases so that there is an excess demand e. falls so that the new equilibrium price is lower than the old
A monopoly is MOST likely to be temporary if the monopoly power is derived from:
A) high barriers to entry. B) a lack of substitutes for the monopolist's product. C) economies of scale. D) technological change.
Regarding the purchasing of INSURANCE in particular, the most important difference(s) between "adverse selection" and "moral hazard" in general is/are that
A. adverse selection deals with "hidden information," whereas moral hazard deals with "hidden actions." B. usually the insurer worries more about adverse selection BEFORE the insurance is purchased, whereas it worries more about moral hazard AFTER the insurance is purchased. C. Both of the above statements are true. D. None of the above statements are true.
A monopoly earns total revenue of $20,000 when it sells 200 units of output and total revenue of $22,000 when it sells 240 units of output. Thus, the marginal revenue of the 240th unit is $91.67.
Answer the following statement true (T) or false (F)