According to the simple quantity theory of money, which of the following variables are considered either constant or relatively stable?
A. P and Ms
B. P and Y
C. Y and Ms
D. V and Y
Answer: D
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In the above figure, for a single-price monopolist producing at its profit-maximizing equilibrium price and quantity, the price elasticity of demand at this equilibrium will be
A) greater than 1 and the monopolist's total revenue is maximized. B) less than 1 and the monopolist's economic profit could be larger. C) equal to 1 and the monopolist's total revenue is maximized. D) greater than 1 and the economic profit is maximized but the total revenue is not.
When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance, the insurance market is said to face the problem of
A) economic irrationality. B) asymmetric information. C) adverse selection. D) moral hazard.
The fact that a perfectly competitive firm has a perfectly elastic demand curve means
A) there is no limit to the firm's profits. B) there is no limit to the firm's revenues. C) that it can sell all it wants at any price. D) None of the above
"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement
a. True b. False Indicate whether the statement is true or false