An empirical study determines that price exceeds marginal cost at the levels of output of firms in long-run equilibrium in the widget industry. The widget industry may therefore
a. be monopolistically competitive.
b. have firms whose goal is sales maximization.
c. have firms that act as price leaders.
d. All of the above are correct.
d
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The false paradigm model attributes lack of development to
a. inadequate attention to price incentives. b. inappropriate advice from rich country economists. c. low levels of savings and investment. d. a lack of government regulation.
The objective of rent controls is to
A) ensure an adequate supply of rental housing for the poor. B) keep rents below levels that would be observed in a freely competitive market. C) encourage the construction of new rental units. D) raise revenue for the local government.
Which of the following decreases the demand for money?
A) an increase in income B) an increase in real GDP C) a decrease in the price level D) expectations of higher bond prices
Assume the US has a comparative advantage in producing large jets (LJs) and Brazil has a comparative advantage in producing small jets (SJs). Assume further that the US has an absolute advantage in producing both LJs and SJs. Which of the following would most likely shift the PPFs for both countries to the right?
a)The US produces both LJs and SJs and trades with Brazil who will produce something else. b) The US will produce all LJs and Brazil will produce all SJs and they will NOT trade with each other. c) The US will produce all SJs and Brazil will produce all LJs and they WILL trade with each other. d) The US will produce all LJs and Brazil will produce all SJs and they WILL trade with each other. e) If each country produces LJs and SJs up to the point where the opportunity cost of each is zero.