Cab drivers operating from JFK Airport to the City of New York legally must charge a specific fare. This is an example of
A) social regulation.
B) economic regulation.
C) the market share test.
D) the rate of return test.
B
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If we look at real and nominal interest rates in the United States since 1971, we see that
A) the real interest rate has almost always been less than the nominal interest rate because of inflation. B) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it. C) the difference between the nominal and real interest rates has widened during the 1990s because of inflation. D) the nominal interest rate has always been less than the real interest rate because of inflation. E) both the nominal and real interest rates were negative in the highly inflationary 1970s.
Which of the following is TRUE regarding the real interest rate?
I. The real interest rate is the opportunity cost of borrowed funds. II. The real interest rate equals the nominal interest rate adjusted for inflation. A) I B) II C) both I and II D) neither I nor II
Suppose that 75 percent of a cigarette tax is borne by consumers. If the supply elasticity is 1, the demand elasticity is equal to:
A. 1/2. B. 1. C. 1/3. D. 1/4.
Other things being equal, when average productivity falls:
A. average fixed cost must rise. B. marginal cost must rise. C. average variable cost must rise. D. average total cost must rise.