Keynesians would recommend
A. Lower government expenditures when there is a shortfall in aggregate demand.
B. Lower taxes when there is excess aggregate demand.
C. Higher taxes when there is excess aggregate demand.
D. Reliance on the market rather than the government for adjustment when an undesirable level of aggregate demand occurs.
Answer: C
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Compared to a perfectly competitive firm, a monopolist
A. is less likely to advertise. B. will, according to Schumpeter, invest fewer resources in research and development. C. usually produces an inefficiently small level of output. D. is less likely to face government regulation.
In a market system, the working of the price system only results in the distribution of income.
Answer the following statement true (T) or false (F)
The invisible hand of the marketplace acts to allocate resources
a. efficiently but does not necessarily ensure that resources are allocated fairly. b. both fairly and efficiently. c. fairly but does not necessarily ensure that resources are allocated efficiently. d. neither fairly nor efficiently.
Price discrimination allows a producer to
A. Reap the highest possible average price for the quantity supplied. B. Decrease total costs. C. Increase the elasticity of consumer demand. D. Minimize marginal costs.