U.S. monetary policy in the early 1980s reduced the inflation rate by more than half
a. True
b. False
Indicate whether the statement is true or false
True
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Two companies in a city provide insurance for cars—Company A and B. Company A pays 100% of the money required for repair in case of an accident, while Company B pays 70% of the total money required
A research agency has found that Company A's customers have more accidents. Which of the following explains this difference? A) Moral hazard B) Adverse selection C) The presence of positive externalities D) The presence of negative externalities
Historical demand curves are always suspect because their demand curves are likely to have shifted over time.
Answer the following statement true (T) or false (F)
Which of the following is true?
a. Large corporations earn profits, while smaller firms realize losses. b. Profits attract businesses to productive projects, while losses discourage them from undertaking unproductive activities. c. Profits indicate that businesses are over-charging customers, while losses suggest that they should raise customer prices. d. If corporations want to increase profits, they will always be able to do so by either increasing product prices or reducing employee wages.
Figure 11-3
Using the graph in Figure 11-3, the profit-maximizing monopolist will charge a price
a.
of more than $3.
b.
of $3.
c.
between $2 and $3.
d.
of $2.