A major distinction between government purchases and government transfer payments is that
A. transfer payments divert resources from private uses to public uses while government purchases do not.
B. government purchases have to be approved by Congress while transfer payments do not.
C. government purchases of goods and services have increased more rapidly during the past 20 years than have transfer payments.
D. government purchases divert resources from private uses to public uses while transfer payments do not.
Answer: D
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If a regulatory agency sets the price equal to marginal cost for a natural monopoly, the
A) government might have to provide a subsidy to the firm to keep it in business. B) price is the same as the unregulated monopoly price. C) firm makes an economic profit, though not the maximum economic profit. D) firm makes the maximum economic profit. E) firm makes zero economic profit.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy was to engage in free trade, the good would:
A. not be imported or exported and only be produced domestically. B. no longer be produced domestically. C. be imported. D. be exported.
There is resistance to exchange rate fluctuations because changes in the value of a currency are likely to cause all of the following except
A. The return to a worldwide gold standard. B. Uncertainty for people who invest in world markets. C. A change in the price of imports. D. A change in the price of exports.
In the highly competitive setting in which oligopoly firms operate, which of the following are considered to be typical temptations for firms?
A. to cooperate to generate and then divide up monopoly-like profits B. to cooperate to mutually decide what price to charge C. to cooperate to make decisions about what quantity to produce D. all of the above