Which of the following will the Federal Reserve do to decrease the money supply?
a. Decrease the salaries of government employees.
b. Sell government bonds.
c. Buy government bonds.
d. Raise taxes.
e. Sell corporate bonds.
B
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When a society achieves allocative efficiency, it
A) is not achieving production efficiency. B) is producing that combination of goods and services that society values most highly. C) might or it might not be producing at a point on society's PPF. D) is producing a combination of goods and services whose marginal cost exceeds their marginal benefit. E) is producing the combination of goods and services for which marginal benefit exceeds marginal cost by as much as possible.
Which of these actions will occur to the budget constraint when an individual's income increases?
a. shifts outward b. shifts backward c. rotates clockwise d. cannot be determined from the information given
Setting price equal to marginal cost in a natural monopoly will lead to
a. excess profits for the firm. b. losses for the firm. c. zero profits for the firm. d. One cannot tell without further information.
Monopolies can misallocate resources by restricting output in an attempt to raise prices and profits.
Answer the following statement true (T) or false (F)