________ means that government sets the rules for market competition.
A. Market dynamics
B. Market regulation
C. Market economics
D. Government metrics
Answer: B
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Consumers tend to accept the market restrictions imposed by suppliers because:
A. government prevents them from organizing. B. their costs of organizing are higher than the cost of the collusion by the suppliers. C. they see themselves as laborers and therefore benefit from restrictions. D. when combined, their losses are small for the group as a whole.
The Phillips curve assumes that shocks to the economy come from the demand side.
Answer the following statement true (T) or false (F)
Refer to the diagram for a pure monopolist. If a regulatory commission sets the price to achieve the socially optimal allocation of resources, it will have to:
A. tax the monopolist P 3 P 1 per unit to prevent the monopolist from realizing an economic
profit.
B. subsidize the monopolist or the monopolist will go bankrupt in the long run.
C. subsidize the monopolist P 1 P 4 per unit to allow the monopolist to break even.
D. tax the monopolist P 1 P 2 per unit to prevent the monopolist from realizing an economic
profit.
An intended goal of contractionary fiscal and monetary policy is
A) an increase in interest rates. B) an increase in the price level. C) a decrease in the unemployment rate. D) a decrease in the level of aggregate output.