If a monopoly can produce a good at zero marginal cost, then its Lerner Index is
A) zero.
B) one.
C) infinity.
D) undetermined.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
If it is said that a currency is overvalued against the dollar, it is meant that:
A) the dollar is worth more of that currency than it would have been under a fixed exchange rate regime. B) the dollar is worth less of that currency than it would have been under a fixed exchange rate regime. C) the dollar is worth less of that currency than it would have been under a flexible exchange rate regime. D) the dollar is worth less of that currency than it would have been under a managed exchange rate regime.
The U.S. sugar quota
A) generates government revenue. B) results in net welfare benefits to the U.S. economy. C) results in benefits to sugar producers that exceed the cost to consumers. D) results in costs to consumers that exceed the benefits to sugar producers. E) does not result in an efficiency loss.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.