Which of the following is not a problem for the price system allocating resources among different time periods?
A. Interest rates are used for a variety of purposes other than influencing investment.
B. The market devotes too much to immediate consumption.
C. Our market system leads to lesser real incomes for later generations.
D. Our market system despoils irreplaceable natural resources.
Answer: C
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Suppose a monopolist has zero marginal cost but positive recurring fixed costs. Then, if it is efficient to produce, the efficient quantity to produce occurs where demand crosses the horizontal (quantity) axis.
Answer the following statement true (T) or false (F)
Suppose that nominal GDP in 2016 was less than real GDP in 2016. Given this information, we know for certain that
A) real GDP in 2016 was greater than real GDP in the base year. B) the price level in 2016 was less than the price level in the base year. C) real GDP in 2016 was less than real GDP in the base year. D) the price level in 2016 was greater than the price level in the base year.
If an economy initially starts away from the steady state ________
A) output will gradually fall over time B) the economy will converge to the steady state in the long-run C) consumption spending must be greater than investment spending D) consumption spending must rise
Using a commitment strategy in:
A. a simultaneous game can alter payoffs, but has no effect in sequential games. B. a simultaneous game has no effect, but can alter the payoffs and outcome of sequential games. C. either a simultaneous or sequential game has little impact on payoffs or outcome. D. either a simultaneous or sequential game can greatly alter the payoffs and outcome of the game.