Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation?
a. a consumer deciding to delay the purchase of a new home or automobile
b. a consumer who borrows money at a fixed interest rate in order to purchase a new home or automobile
c. an investor who borrows funds at an adjustable money interest rate (one that automatically increases with higher inflation)
d. a home buyer who borrows funds at a variable interest rate
B
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In an analytical sense, unions can be thought of as
A) setters of minimum wages. B) monopoly buyers of workers. C) generators of inflation. D) monopsonies.
Which of the following accurately describes a major difference between a monopolist and firms in perfectly competitive markets?
a. The monopolist maximizes profit; firms in perfectly competitive markets maximize sales b. The monopolist may earn long-run economic profit; firms in perfectly competitive markets cannot. c. The monopolist is a price taker; firms in other markets are price searchers. d. The monopolist may earn short-run profit; firms in perfectly competitive markets cannot.
The main problem with a regulatory commission setting P = ATC is that the regulated firm will
a. experience a loss b. find its demand curve shifting to the left c. earn economic profits d. refuse to make new purchases of capital e. have little incentive to keep costs down
Refer to Figure 8.7. Which of the following statements is true?
A. The technology represented in graph A will cause the firm to experience diseconomies of scale.
B. The technology represented in graph B will cause the firm to experience diseconomies of scale.
C. The technology represented in graph B will cause the firm to experience economies of scale.
D. The technology represented in graph C will cause the firm to experience diseconomies of scale.