A perfectly competitive market results in efficiency because
A. Price rises high enough to equal marginal cost.
B. MC < P.
C. Price is driven down to minimum ATC.
D. Zero economic profit is achieved.
Answer: C
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People who come to fear that their wealth is going to be confiscated will acquire a relatively greater incentive to invest in
A) agricultural land. B) human capital. C) machinery and physical equipment. D) urban real estate.
In which of the following situations might you expect expansionary monetary policy to reduce the unemployment rate?
A) if changes in monetary policy are unanticipated B) if expectations are rational C) if actual inflation is lower than expected D) if actual inflation is higher than expected
The tradeoff for monetary policy represented by the Phillips curve is
a. lower inflation for lower output. b. lower inflation for higher unemployment. c. lower inflation for higher employment. d. higher expected inflation for higher output. e. none of the above.
Refer to Scenario 13.17. If the Incumbent Monopoly installed excess capacity in advance of the Potential Entrant's appearance on the scene, and this excess capacity had a cost of $X, it would reduce by $X the Incumbent Monopoly's payoffs in the
A) top row. B) bottom row. C) left column. D) right column. E) entire matrix.