Which would be characteristic of monopolistic competition?
A. Relatively small market share for each firm.
B. Product standardization.
C. A potential for price-fixing through collusion.
D. Mutual interdependence among the few firms.
Answer: A
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Unexpectedly high inflation:
a. Is only a problem for private individuals and not for businesses or the government. b. Tends to redistribute income more than it harms the nation as a whole. c. Makes everyone worse off. d. Reduces business profitability. e. Is only a problem for the government.
The Coase theorem states that
a. under certain circumstances government intervention is not needed to reach efficient outcomes when an externality is present. b. government intervention is always required to reach an efficient outcome when an externality is present. c. government intervention cannot lead to an efficient outcome when an externality is present. d. only negative externalities can be resolved using government intervention.
Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the accompanying table.Number of Mugs Per DayTotal Cost Per Day0$101$142$193$254$325$406$49 If the market for mugs is perfectly competitive, and mugs sell for $7.50 each, then at his profit-maximizing level of output, Chris will earn a ________ of ________ per day.
A. profit; $30 B. loss; $2 C. profit; $2 D. loss; $10
The primary cause of the reduction in the nominal money supply during the early years of the Great Depression was
A) the Fed's sale of bonds. B) the Fed's purchase of bonds. C) a reduction in the money multiplier. D) none of the above