Which is considered to be an economic resource by economists?
A. Rent
B. Labor
C. Money
D. Wages
Answer: B
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Refer to Figure 3.2. If Wilma plays North and Betty plays East, what is Betty's payout?
A) 12 B) 15 C) 16 D) 21
Monopolistically competitive firms
A) have market power because they can set price above marginal cost. B) have no market power because they earn zero economic profit. C) have no market power because of free entry. D) have no market power because price equals marginal cost.
If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will:
a. ignore the policy until it exerts an observable impact on prices, output, and employment. b. quickly take steps to adjust their decision making in light of the more expansionary policies. c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy. d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.
Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?
What will be an ideal response?