An association of producers in an industry that agree to set common prices and output quotas to prevent competition is
A) an oligopolist.
B) a monopolistic competitor.
C) a constrained monopoly.
D) a cartel.
Answer: D
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The idea that the production function exhibits _______implies that ________
A) increasing returns; output should increase steadily as technology grows B) constant returns; each additional unit of labor employed generates an increasing amount of real GDP C) diminishing returns; the Lucas Wedge increases at output increases D) increasing returns; potential GDP is always increasing E) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP
Proponents of the ________ model argue that the short-run supply curve is vertical
A) the monetarist model B) the new classical model C) the new Keynesian model D) the real business cycle model
A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good. B) a merit good. C) an externality. D) the free-rider problem.
How does the lender of last resort potentially create a moral hazard problem?
What will be an ideal response?