Exhibit 14-1 Aggregate supply curve
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In Exhibit 14-1, there are plenty of idle resources and no upward pressure on prices in:
A. the segment labeled ab.
B. the segment labeled bc.
C. the segment labeled cd.
D. both segment bc and segment cd.
Answer: A
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What will be an ideal response?
Limits on the value of the assets that commercial banks can acquire relative to their capital is known as:
A) equity requirements B) capital requirements C) required reserves D) asset requirements
Refer to Scenario 16.1. Suppose instead that Sam is initially allocated 3 cheese doodles and 3 pretzels, whereas Sally is initially allocated 6 cheese doodles and 10 pretzels. Which of the following statements is TRUE?
A) This allocation is Pareto optimal. B) This allocation is not Pareto optimal as Sally and Sam have unequal amounts of each good. C) The allocation is not Pareto optimal as Sally would be willing to exchange two pretzels for one cheese doodle and be better off, without making Sam worse off. D) The allocation is not Pareto optimal as Sam would willing exchange one pretzel for two cheese doodles and be better off, without making Sally worse off.
In the long run, the economic profits of Hoot's Chicken 'n' Ribs, a monopolistic competitor, are:
a. not eliminated, because competition is not perfect. b. not eliminated, because the demand curve slopes downward. c. eliminated due to firms entering the industry. d. eliminated due to firms leaving the industry. e. not eliminated, because firms cannot enter the industry.