A monopoly may arise due to:
A. a patent.
B. network externalities.
C. large economies of scale.
D. All of these
Answer: D
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Refer to Figure 24-2. Ceteris paribus, an increase in the labor force would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
The German central bank in the European Monetary System, 1979-1998
A) was very inflation-averse. B) was moderately inflation-averse. C) was willing to accept inflation. D) lacked control over inflation since it had fixed its exchange rate. E) lacked sufficient reserves.
When economists assume that people act rationally, it means they: a. make decisions based on complete and accurate information
b. make decisions that will not be regretted later on. c. make decisions based on what they believe is best for themselves using available information. d. make decisions based solely on what is best for society.
A company has an investment project that will cost $2 million today and yield a payoff of $3 million in 5 years. If the interest rate is 7%, should the firm undertake the project? Show evidence to support your answer