The soft drink (colas in particular) industry can be best modeled using the model of
A. monopolistic competition.
B. perfect competition.
C. monopoly.
D. oligopoly.
Answer: D
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Refer to Figure 17-2. Suppose the economy is at point B in the figure above. Which of the following is true?
A) The economy is producing at potential GDP. B) The current unemployment rate is 5%. C) Expected inflation and actual inflation are the same. D) The expected rate of inflation is 3%. E) The natural rate of unemployment is 3.8%.
The reason that people may not want to hold money is
A) the precautionary demand for money and the risk of being robbed. B) the opportunity cost. C) the transactions demand makes it unnecessary. D) due to the direct relationship between money demand and the interest rate.
If the price elasticity is supply coefficient is greater than one, then supply is:
A. elastic. B. inelastic. C. perfectly elastic. D. perfectly inelastic.
The Volumetric Ethanol Excise Tax Credit (VEETC) is a tax credit (which acts like a subsidy) for registered ethanol-gasoline blenders. Qualified blenders receive $0.51 for each gallon of pure ethanol they blend into gasoline
What statement is TRUE? A) With a subsidy, the price paid by consumers will be lower than without a subsidy. B) Without a subsidy, the quantity produced by blenders will be greater than the quantity demanded. C) With a subsidy, the equilibrium quantity produced will be lower than without a subsidy. D) With a subsidy, production will be efficient.