Risk-averse persons will take no risks
a. True
b. False
Indicate whether the statement is true or false
False
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When a shortage exists
A) the price is below the market clearing price. B) quantity demanded exceeds quantity supplied. C) an excess quantity demanded exists. D) all of the above
If a public utility is subject to average-cost pricing regulation, it will: a. earn a normal rate of return
b. produce the socially efficient level of output. c. suffer economic losses without a subsidy. d. earn an above-normal rate of return.
Which of the following dampens the effect on GDP of a change in government spending?
a. The money supply changes when real income changes. b. Taxes change when government spending changes. c. Money demand changes when real income changes. d. People do not expect much from the government. e. Aggregate spending does not respond to changes in the interest rate.
Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
a. neither good. b. automobiles. c. airplanes. d. both goods.