Between 1998 and 2001, the federal budget was:
a. never in surplus.
b. never in deficit.
c. in surplus.
d. in surplus about as often as it was in deficit.
c
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Is a monopolistically competitive firm allocatively efficient?
A) No, because it does not produce at minimum average total cost. B) Yes, because price equals average total cost. C) No, because price is greater than marginal cost. D) Yes, because it produces where marginal cost equals marginal revenue.
A game in which pursuing dominant strategies results in noncooperation that leaves all parties worse off is a
A) prisoner's dilemma. B) cooperative equilibrium. C) zero-sum game. D) first-price auction.
The PDV of a perpetuity with a yearly payment of $500 at an interest rate of 5% is
A) $100. B) $5,000. C) $25,000. D) $10,000. E) $100,000.
Suppose that the market price of good X equals the firm's cost of producing that good, but it does not reflect any costs imposed on society. Which of the following is FALSE?
A) The good is priced too low. B) An external benefit is associated with good X. C) Resources are over-allocated in the production of good X. D) Too much of good X is being produced.