Natural monopolies occur when
a. government antitrust laws are too weak or not enforced
b. negative externalities are present
c. firms collude to set prices and divide the market among themselves
d. one firm can service the market more cheaply than two or more firms can
e. a public good is produced by a private firm
D
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Which of the following is not a part of the scientific method in economics?
a. normative statements b. comparing predictions to evidence c. formulating a hypothesis d. a hypothesis e. behavioral assumptions
What would happen to the real interest rate if originally the nominal interest rate was 14% and the inflation rate was 10%, then the nominal interest rate fell to 7% as the inflation rate fell to 4%? It would go from: a. 24% to 11%. b. 11% to 24%. c. 4% to 3%
d. 3% to 4%.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency falls. b. The quantity of real loanable funds per time period falls, and nominal value of the domestic currency rises. c. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency remains the same. d. The quantity of real loanable funds per time period rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
The idea that competition is in some circumstances insufficient to achieve allocative efficiency ensure fairness to consumers and competing firms, is most closely associated with which anti-trust perspective?
A. Laissez-faire B. Herfindahl C. Passive D. Active