All of the following are reasons a government might choose to protect monopoly rights in an industry except:
A. because it is in the public's interest to do so.
B. to encourage innovation.
C. to increase consumer surplus beyond what is achieved through competition.
D. to benefit insiders.
Answer: C
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What is the pricing rule that achieves an efficient outcome for a regulated monopoly? What is the problem with this rule?
What will be an ideal response?
If the MPS is 0.1 and the income tax rate is 0.33, and the fraction of income spent on imports is 0.25, then the multiplier is
A) 2.5. B) 1.47. C) 1.51. D) 1.55.
The reason that it is possible for the economy in the above figure to be at E2 rather than at E1 is that
A) in the long run there is always less than full employment. B) in the short run the economy can produce more than it can in a long-run full-adjustment situation. C) AD always shifts outward and never shifts inward. D) the economy must be in a recession.
Which of the following is correct regarding tax revenues?
A. They decrease during economic slowdowns. B. They do not change with changes in the tax rate. C. They increase during recessions. D. They are the only revenue source in the government's budget.