A cable company can add a subscriber for ________ and a market failure occurs because the price charged ________
A) nearly zero marginal cost; exceeds marginal cost
B) less than average cost; reduces consumer surplus
C) nearly zero marginal cost; is extortionist
D) average variable cost; increases producer surplus
A
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If the economy is currently in equilibrium at a level of GDP that is below potential GDP, which of the following would move the economy back to potential GDP?
A) an increase in the value of the dollar relative to other currencies B) a decrease in business confidence C) an increase in wealth D) an increase in interest rates
Keynes hypothesized that the transactions component of money demand was primarily determined by the level of
A) interest rates. B) velocity. C) income. D) stock market prices.
When an investment bank guarantees an issuer of new securities a certain price it is acting as a(n)
A) auctioneer. B) underwriter. C) broker. D) dealer.
Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will
a. increase society's total utility. b. lower Ms. Spring's marginal utility of income. c. increase Mr. Fall's marginal utility of income. d. lower society's total utility.