The producer price index measures:
A) the prices consumers pay for final goods and services.
B) the prices firms pay for crude and intermediate materials as well as finished goods.
C) the prices the government pays for final goods and services.
D) none of the above.
B
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The production possibilities curve tells us that if full employment exists and a nation wishes to permanently increase its production of military goods, it must
A. also increase its production of nonmilitary goods. B. reduce its output of nonmilitary goods. C. suffer inflation. D. suffer unemployment.
If the government attempts to break up a natural monopoly to enforce competition in an industry
A. the average cost of producing the good will increase. B. the smallest firm will have a significant cost advantage over the larger, less efficient firms. C. the average cost of producing the good will decrease. D. the price paid by consumers will be expected to remain the same.
Which of the following is true?
A. In the short run, a monopoly will shut down if P < AVC. B. A monopolist produces on the inelastic portion of its demand. C. A monopolist always earns an economic profit. D. The more inelastic the demand, the closer marginal revenue is to price.
Overnight loans from one bank to another for reserve purposes entail an interest rate called the:
A. prime rate. B. discount rate. C. federal funds rate. D. treasury bill rate.