Antitrust activities can cause inefficiencies by:
A. breaking up a natural monopoly.
B. creating many small firms that cannot capture available economies of scale.
C. Both of these statements are true.
D. Neither of these statements is true.
C. Both of these statements are true.
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Joe consumes pizza and movies. He is currently spending his entire income and his marginal utility of pizza is 10 and his marginal utility of movies is 5
If the price of a pizza is $10 and the price of a movie is $5, then to maximize his utility Joe should A) increase consumption of pizza and decrease consumption of movies. B) increase consumption of movies and decrease consumption of pizza. C) not change his current bundle of movies and pizza. D) increase consumption of both goods.
Unemployment is a lagging indicator because:
A. employers wait to see how bad a recession looks before making the difficult decision to lay off workers. B. firms may first try to decrease or increase the hours of existing employees before changing levels of employment. C. employers wait to see how solid a recovery looks before committing to take on new employees. D. All of these are reasons that make unemployment a lagging indicator.
Which of the following will be most likely to dampen the expansionary effects of an increase in government spending financed by borrowing?
a. The budget deficit will cause business decision makers to become more optimistic. b. The increase in demand for loanable funds as the result of borrowing will cause interest rates to rise and private investment to fall. c. The increase in government spending will cause the money supply to expand, thereby causing an inflationary boom. d. The additional borrowing will cause the central bank to buy more bonds, which will reduce aggregate demand.
When a law is passed that requires businesses to obtain permission from government officials in order to enter a market, this is an example of
a. price-control legislation. b. a barrier to entry c. antitrust legislation. d. the invisible hand principle.